Indian markets, rupee have recovered for now. The future trajectory depends on a mix of factors

Supported by a surge in inflows, the rupee has strengthened and managed to reverse its year-to-date losses. The recovery in stock markets is driven by a change in stance of foreign portfolio investors. In the last two weeks of March, FPIs have been net buyers due to aggressive buying of Indian debt. The spate of selling in the equity market has slowed down considerably, compared to the previous months. Indian stock markets have staged an impressive recovery in March, rebounding from a protracted period of negative returns that began in October. India has been one of the best performing markets…