One Swallow does not make a Summer: Comparing India and China

Posted by: Deepa Vasudevan on Fri, Jan 23rd, 2015

The IMF announcement that India's growth would overtake that of China in 2015-16 set off a market rally. But a meaningful comparison between India and China is possible only if one uses the right economic indicators and an appropriate reference period. Conclusions cannot be drawn on the basis of a single data point. Read more

How Vulnerable is India to an Economic Crisis?

Posted by: Deepa Vasudevan on Wed, Jan 21st, 2015

The Mid-Year Economic Review introduced the concept of a Macroeconomic Vulnerability Index, or MVI, which indicates the potential for the occurrence of an economic crisis by combining three key economic indicators. MVI is a simple and effective early warning indicator, but must be used with caution. Read more

The RBI rate cut: A Signal of Support

Posted by: Deepa Vasudevan on Fri, Jan 16th, 2015

The RBI cut the policy rate by 25 basis points on 15 January 2015, signaling the end of the interest rate tightening cycle. This action reflects the need to stimulate demand given that inflation pressures have subsided with falling crude prices. Read more

The Best Investment in 2015

Posted by: Uma Shashikant and Deepa Vasudevan on Thu, Jan 8th, 2015

The best performing asset classes have changed completely between the start and the end of 2014. The chief lesson for 2015 is to maintain a diversified portfolio that can benefit from debt, equity and commodities, while still beating major benchmarks. Read more

FII flows and market returns over the last 10 years

Posted by: Uma Shashikant and Labdhi Mehta on Wed, Jan 7th, 2015

FII money is considered to be "hot" and "smart". We look at the last 10 years data to see if it holds true. This blog discusses the record high $25 bn FII inflows to the debt market in 2014 which surpassed the equity market inflows despite a good equity return.  Read more