US Investors started pulling out of the bond market as the expected federal reserve benchmark interest rate cut is not about to happen in the near future. The labour market is also showing a healthy trend as the jobless claims for benefits have reduced by about 12000 in the past week. Also the import prices have increased by about 1% as compared to a meagre 0.3% for exports. Expected inflation which will reduce the returns on fixed interest investments is the main reason for the investor’s reaction. In the previous weeks the expected interest rate cut had caused the treasury yields to become lower whereas now the reverse is happening thereby driving the yields from the bond market higher.

Popularity: 40% [?]

With India having allowed Mutual funds to invest in foreign stocks with a cap of $ 5 billion only about $ 882 million of this capacity was utilised as Indian prefer investing in domestic stocks than foreign ones. The Indian investors feel that at a time when the foreign funds are coming into India for being invested, they should not be investing in foreign stocks. The geographical diversification offered by these foreign funds hold little value to the Indian investors. Moreover the tax regulations also add to this by placing a restriction on investments which are more than 35% of the assets. Such investments in excess of this are taxed at a higher rate. So despite the rise in the cap the tax regulations still dampen the purpose of this increased cap.

Popularity: 34% [?]