India’s bonds are top performers in developing markets this year, aided by a record high stock market driven by strong domestic liquidity. The country’s appeal lies in stable political ties with the US and Russia, capital controls that restrict speculative flows, and a currency less affected by dollar fluctuations compared to other emerging markets.
India’s sovereign bonds remained stable last week despite a global selloff of US Treasuries. The country is increasingly seen as a key emerging market investment for abrdn plc., especially with the upcoming US presidential election on Nov. 5, as hedge funds brace for heightened global volatility.
“India’s local bond market is relatively insulated from global volatility, staying calm during turbulent times,” said Edward Ng, a bond fund manager at Nikko Asset Management Co. “With low market volatility, we are confident in our Indian bond investments, which could perform well in a strong-dollar environment.”