India exchange traded funds are pausing for a breather after gaining over 40% in early 2012 to lead the charge in emerging markets ETFs. They are currently trading around the 200-day moving average.
Some of the largest ETFs tracking India experienced modest loses for the week ended March 9, including WisdomTree India Earnings Fund ETF (NYSEArca: EPI), iPath MSCI India ETN (NYSEArca: INP), Powershares India Portfolio ETF (NYSEArca: PIN), iShares S&P India Nifty 50 Index Fund ETF (NYSEArca: INDY) and iShares MSCI India Index Fund (NYSEArca: INDA). [India ETFs in Bull Market Territory]
The losses would have been deeper, except the RBI unexpectedly announced a 75 basis point cut to its cash reserve ratio rate on banks, which helped provide a good boost to Indian stock ETFs last Friday, writes Christian Magoon. Inflation levels are coming down to manageable levels.
Magoon believes that last week’s election results, interest rate policy and India’s 2012 Union Budget presentation are weighing on the upward march in India ETFs. [India ETFs: Breakout or Fakeout?]
The new elections put India’s need for government and business reforms into focus. This week, the market is anticipating the RBI’s announcements on the interest rate, followed by the government’s presentation on its 2012 Union Budget.