Goldman Sachs sees India bonds getting added to JPMorgan Index with an initial 10% weightage Indian government bonds may be added to a global index next year, triggering passive inflows of about $30 billion that will help the country to finance its current account and fiscal deficits, according to Goldman Sachs Group Inc. The nation’s sovereign bonds may be added to JPMorgan’s GBI-EM Global Diversified bond index with an initial 10% weightage, analysts Danny Suwanapruti and Santanu Sengupta wrote in a note to clients. India’s $1 trillion sovereign bond market is one of the biggest emerging markets not to be part of any global index. Also Read: Zerodha’s Nikhil Kamath tells when to buy stocks, shares Buffett formula to find the right time “Adding India, which is a large, deep and high-yielding market, would help to diversify as well as boost the average yield of the overall index,” the analysts wrote. “Such a move would be beneficial to various stakeholders, including EM investors and the Indian government.” Benchmark 10-year yields fell 11 basis points to 7.18% on Wednesday as the markets reopened after an extended weekend. Account openings for foreigners are still cumbersome in India but can be addressed by a longer lead time for inclusion, according to the note. The country has also made some progress on operational issues, like posting margin requirements and extended settlement timings, the analysts wrote. Bloomberg LP is the parent company of Bloomberg Index Services Limited (BISL), which administers indexes that compete with indexes from other providers. Also Read: Global fund managers no longer ‘apocalyptically bearish’, increase stock allocation, trim cash
Last Friday, WTI and Brent slid 3% after strong U.S. jobs data raised concerns that the Federal Reserve would keep raising interest rates, which in turn boosted the dollar. While recession fears dominated the market last week, on Sunday International Energy Agency (IEA) Executive Director Fatih Birol highlighted that China’s recovery remains a key driver for oil prices.
“If demand goes up very strongly, if the Chinese economy rebounds, then there will be a need, in my view, for the OPEC+ countries to look at their (output) policies,” Birol told Reuters on the sidelines of a conference in India.Price caps on Russian products took effect on Sunday, with the Group of Seven (G7), the European Union and Australia agreeing on caps of $100 per barrel on diesel and other products that trade at a premium to crude, and $45 per barrel for products that trade at a discount, such as fuel oil.
“For the moment, the market expects non-EU countries will increase imports of refined Russian crude, thus creating little disruption to overall supplies,” ANZ analysts said in a client note. “Nevertheless, OPEC’s continued constraint on supply should keep the market tight,” they said.