India’s economy has been hit hard by the COVID-19 pandemic. But could the impact of vaccines – combined with the country’s core growth drivers – increase India-oriented stock market funds in 2021?
India has been hit hard by the pandemic, with more than 10 million cases. Its economy suffered in 2020; In a note from January 2021, IHS Markit estimated that gross domestic product in fiscal year 2020-21, which ends March 31, would contract by 8.9% compared to the previous year.
However, there could be positive signs for the future. The company notes a return to economic activity in September and expects GDP growth to return by 8.9% in fiscal year 2021-22. Meanwhile, on February 1, the government announced an increase in infrastructure spending in its budget, which analysts believe could also support the increase.
India’s recovery rally has been led by high-quality, high-capacity companies, especially those in technology, energy and healthcare, says Rene Reyna, thematic and product special strategist at Invesco ETFs & Indexed Strategies. The company operates the PIN code ETF Invesco India,
a $ 107.2 million fund, which had returns of 18.5% in 2020 and fell by about 2% until this year, until January 29. Reyna says India’s large information technology sector has been a determining factor in the recovery, “benefiting from aggressive work-home efforts. ”
An extended version of this report appears on WSJ.com.
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