Global index provider FTSE Russell said it would not yet include India in an index of the government bond index, a week after JPMorgan said India would be part of its influential GBI-EM index suite starting next year. FTSE said in its annual country classification review that the FTSE Emerging Markets Government Bond Index is expected to be released by end of this year.
The news of Indian government bonds and local currency took the news in their stride.
The rupee was trading slightly higher after closing at 83.1850 on Thursday, while the benchmark bond yield eased three basis points to 7.2126, from 7.2414% at Thursday's close.
Analysts estimate India's inclusion in the JPMorgan index to bring in around $23 billion in index-linked investments.
The JP Morgan inclusion prompted BNP Paribas Asset Management to turn more positive on Indian bonds, said Jean-Charles Sambor, head of emerging markets, fixed income at BNP Paribas Asset Management.
Sambor expects the benchmark bond yield to drop below 7% by the end of the year and the rupee to decrease to 82.00-82.25 per U.S. dollar in six months.