If a long-awaited inclusion into global indexes once again fails to take place the overseas investors investing into into Indian bonds are at a risk of losses.
Bond purchases by global funds under the so-called Fully Accessible Route jumped to 42 billion rupees ($529 million) in August, the most since January. They have already snapped up an additional 31 billion rupees of the securities in September.
The inflows have added fuel to a bond rally driven by optimism that JPMorgan Chase & Co. will announce the inclusion of Indian debt in its emerging-markets index as early as the middle of this month. Any disappointment may damp sentiment and lead to a selloff, according to Quantum Asset Management Co..
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