Consequently, the ratings agency has placed a negative outlook on Brazil’s BBB-rating.
On the other hand, India is better situated to defend against shocks, and the credit rating agency held a stable outlook on the country’s rating of BBB-.
Year-to-date, the WisdomTree India Earnings Fund (NYSEArca: EPI) fell 2.2%, iShares India 50 ETF (NasdaqGM: INDY) was down 0.2% and PowerShares India Portfolio (NYSEArca: PIN) rose 2.5%. [Investors Piling Into India Markets, Stock ETFs]
“We think India has made more tangible progress in reducing its exposure to Fed-driven market volatility since the ‘Taper Tantrum’ two years ago,” according to Fitch Ratings. “Foreign-exchange reserves have grown and are high in terms of current exchange payments relative to peers. The current account remains in deficit, but has narrowed, initially helped by temporary gold import curbs, but also due to the fall in international oil prices and lower inflation reducing investment demand for gold. Structural reforms and the resulting pick-up in investment support India’s growth outlook, and we forecast growth to accelerate to 8.1% in FY17.”
For more information on Brazil, visit our Brazil category.
Max Chen contributed to this article.