India Infrastructure ETF Gets a Boost

The EGShares India Infrastructure Index Fund (NYSEArca: INXX) is up about 2.3% Wednesday, making it the day’s second-best non-leveraged exchange traded fund to this point after infrastructure shares rallied during the Indian session.

The benchmark BSE Sensex is now on a two-day winning streak, one that snapped a multi-day losing skid following the release of India’s budget last week. INXX is popping today on news India’s central bank is taking steps to spark increased and much-needed infrastructure spending. [ETFs for Increased Infrastructure Largess]

“Gains in lenders and infrastructure shares were sparked after the Reserve Bank of India issued guidelines exempting bonds for the sector from reserve requirements,” reports Abhishek Vishnoi for Reuters.

Previously, Indian lenders were required to hold a portion of their capital in cash or government bonds, making the issuance of long-term bonds, including those used to fund infrastructure projects, unattractive, the Wall Street Journal reported.

INXX entered Wednesday with a six-month gain of 42.2%, making it the second-best non-leveraged ETF over that time. The Market Vectors India Small-Cap Index ETF (NYSEArca: SCIF) is the only non-leveraged ETF that has outpaced INXX over that period.

INXX rallied in the months leading up to May’s landslide victory for Hindu nationalist Narendra Modi on expectations that Modi would make increased infrastructure spending a centerpiece of his efforts to jolt growth in Asia’s third-largest economy. [Election Could Lift India Infrastructure ETF]