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Exchange traded funds that invest in India joined the global stock rally Tuesday on signs global leaders are taking steps to address Europe’s debt crisis.

The iShares S&P India Nifty 50 Index Fund (NASDAQ:INDY) gained 0.5% Monday and opened higher Tuesday.

“On Monday Nifty futures tested a panic low of 4756, but recovered towards the end of the day and closed at 4840, at a premium over the spot Nifty, indirectly showing emergence of a lower level support ahead of September F&O expiry,”Alex Mathews, Research Head at BNP Paribas, on Economic Times.

Positive global market sentiment has been a result of the renewed hope that Eurozone leaders are closer to reaching a bailout approval.

Inflation in India does remain at a higher rate than the Bank of India prefers. The Reserve Bank of India has raised interest rates in an effort to quell inflation. Inflation is at 9.78% for August, reports Drew Neson and Kartik Goyal for Bloomberg, with higher food and fuel prices working against efforts.

Inflation has been fairly stubborn,” Governor Duvvuri Subbarao said in New York. “Above a threshold, you can’t accept high inflation to have higher growth,” he said, adding that the price-rise limit is as much as 6% for the country.

iShares S&P India Nifty 50 (INDY)

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india-etf

Tisha Guerrero contributed to this article.

Disclosure: None

Source: India ETFs Join Risk-On Rally