- Indian stocks and ETFs jump amid government budget proposal to boost economy
- $12.9 billion proposed on rural programs such as expanding irrigation projects, crop insurance and village roads
- ETF investors who are seeking to tap into the developing economies should focus on the potential growth in consumer sectors
Indian stocks and country-specific exchange traded funds jumped as the consumer sector advanced on increased government measures to bolster the local economy.
On Tuesday, the WisdomTree India Earnings Fund (NYSEArca: EPI) rose 4.7%, and the PowerShares India Portfolio (NYSEArca: PIN) gained 3.9% and the iShares India 50 ETF (NasdaqGM: INDY) increased 5.2%. Year-to-date, EPI was down 15.0%, PIN was 12.0% lower and INDY declined 13.4%.
Meanwhile, the EGShares India Consumer ETF (NYSEArca: INCO) added 4.2% Tuesday and was 14.5% lower year-to-date.
Indian equities rose the most in 30 months on speculation that the government’s budget would boost rural demand and support the consumer sector, reports Rajhkumar K Shaaw for Bloomberg.
Prime Minister Narendra Modi proposed a budget of 877.7 billion rupees, or $12.9 billion, on rural programs such as expanding irrigation projects, crop insurance and village roads. The added stimulus measures is seen as icing on the cake.
“The economy on the ground is reviving and there’s no necessity to substantially boost the fiscal stimulus,” Neelkanth Mishra, managing director for equity research at Credit Suisse Securities (India) Pvt., told Bloomberg. “All high-frequency indicators – oil-product demand, cement volumes, retail consumption, credit growth – are suggesting that the economy is recovering.”
ETF investors who are seeking to tap into the developing economies should focus on the potential growth in consumer sectors.
“Strong consumer-oriented companies are a good bet and some commodity producers are becoming more attractive,” Franklin Templeton’s Mark Mobius told Bloomberg.
Investors interested in accessing these sectors can also consider related ETF options.