Figure 3: India’s Current Account as Percentage of GDP

If India has embarked on a multimonth period of interest rate cuts, such accommodative monetary policy could be a bullish catalyst for the Indian economy and the Indian equity market. The stage is now set for Finance Minister Arun Jaitley to present a reform-friendly budget next month. Should the new Indian government be able to propose and enact new pro-growth economic policies, look to see more interest in—and money flowing into—Indian stocks.

Unless otherwise noted, data source is Bloomberg, as of 1/15/2014.

1Source: Bloomberg, as of Q4 2014.

Important Risks Related to this Article

Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations. Investments focused in India are increasing the impact of events and developments associated with the region, which can adversely affect performance.

The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.