INSUBCONTINENT EXCLUSIVE:
approach to policy change
per cent compared with the 10-year average of 3.51 per cent, according to Bloomberg data
The higher spread reflects attractiveness of equities over bonds
This is likely to support the valuations of Indian equities.
Typically, when the earnings yield is higher than the bond yield, fund managers
tend to allocation from bonds to equities
Consequently, this results into re-rating of equities
At 18.8 times of the one-year forward earnings, the Indian market is among the most expensive globally.
Foreign investors looking for
6.9 per cent in the five years to 2016.
The US Federal Reserve futures indicates four interest rates cuts each of 25 basis points in the
This will further support equity valuation.
Foreign portfolio investors have invested nearly $11 billion in equities in 2019 so far, the
highest amount in the comparable period of each of the past six years.
