2018 has been a mixed bag for India’s financial markets. The bond market has seen significant gyrations, only for yields to end the year virtually flat from 12 months ago. Meanwhile, the 7% rise in the Sensex means it has outperformed most other major EM equity markets this year. However, the 9% slump in the rupee against the US dollar makes it one of worst performing EM currencies over the past 12 months. Looking ahead to 2019, we think that local equities will drop and the rupee will weaken further. Domestic factors including concerns over the central bank’s independence and heightened political uncertainty surrounding the general election will weigh on local markets. Meanwhile, we think that slower growth in the US will cause the S&P 500 to slump and investors to retreat from risky assets generally.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services