India Shines Bright

Domestic indices failed to perform well in dollar terms for the better part of 2018 because of the sharp rupee plunge in a deteriorating macro environment. Things, however, have changed dramatically in the past three months. Oil prices, which rose to over $80 a barrel in the first six months or so of 2018, started trending lower in the latter half of the year.

India has not just outperformed other emerging markets (EMs), it also attracted the highest ETF flows among EM peers in December. This amid concerns about the strength of the US economy, and an expected slower pace of rate hikes by the US Federal Reserve has pushed the rupee higher against the dollar, raising market returns for foreign investors. Add to this resilience in the domestic markets of late, and Indian equities look good among EMs. This has been