India’s economic expansion is posed to continue receding as exports fell for the first time in seven years this October, sending related shares and exchange traded funds (ETFs) down.

• India is adding interest rates and tax cuts announced earlier this month to make up for their declining output and exports, indicating a deeper slowdown than expected. The economy will slow but not at a rapid pace, giving the government time to shore up, reports Nipa Piboontanasawat and Kartik Goyal for Bloomberg.
• Inflation also stands above “acceptable” levels, according to the country’s central bank, making monetary policy management more difficult. The Reserve Bank of India cut the repurchase rate by 1%, to 6.5%, earlier this month. It’s the third cut since October, say Kartik Goyal and Arijit Ghosh for Bloomberg.
• The rupee is coming off one-month highs, but it’s still feeling stronger after rate cuts by the Federal Reserve, reports Swati Bhat for Reuters. Foreign institutional investors have been net buyers of about $440 million of Indian shares in December, but they’ve dumped a net $13.2 billion in 2008.

• WisdomTree Dreyfus Indian Rupee Fund (ICN): down 5.2% since May 22 inception

• WisdomTree India Earnings (EPI): down 53.5% since Feb. 26 inception

• PowerShares India (PIN): down 49.3% year-to-date

Tags: Asia, Emerging Markets, EPI, ICN, India, Indian Rupee, PIN