Indian issuers are borrowing lesser through bonds compared to their global peers. The total value of bond issuances was down 10.1 per cent on a rolling 4-quarter basis in March 2022, compared to a similar period in March 2019, shows an analysis of data from tracker Refinitiv, a London Stock Exchange Group (LSEG) business. The four quarters ended March 2019 marked the last full financial year before the pandemic took hold.
As regards India, FIIs have pumped in over Rs 34,400 crore in the Indian stocks in calendar year 2021.
S&P Global Ratings on Monday cut India's economic growth forecast for current fiscal year to 7 per cent, but said the domestic demand-led economy will be less impacted by the global slowdown. S&P had in September projected the Indian economy to grow 7.3 per cent in 2022-23 and 6.5 per cent in next fiscal year (2023-24). "The global slowdown will have less impact on domestic demand-led economies such as India... India's output will expand 7 per cent in fiscal year 2022-2023 and 6 per cent in next fiscal year," S&P Global Ratings Asia-Pacific chief economist Louis Kuijs said.
Foreign portfolio investors (FPIs) have pulled out Rs 4,515 crore from the equities segment in the first half of July as they turn cautious towards the Indian market. "With markets trading near all-time high, FPIs would have chosen to book profits. "They have also been staying on the sidelines given high valuations and most likely on the back of the risk of a potential third wave of the coronavirus pandemic," said Morningstar India associate director (manager research) Himanshu Srivastava. Though the continuing firmness in the dollar and the possibility of rising bond yields in the US do not augur well for capital flows into emerging markets like India, there is no immediate worry at the moment, he said.
The International Monetary Fund (IMF) on Tuesday slashed India's growth forecast for 2022-23 (FY23) by 80 basis points to 7.4 per cent, citing less favourable external conditions and rapid policy tightening by the central bank. In its update to the April World Economic Outlook, the IMF said that though a global recession in 2022 was ruled out with a growth estimate of 3.2 per cent, the balance of risks was squarely to the downside, driven by a wide range of factors that could adversely affect the global economic performance. "The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall.
Stock market investors are expecting a balanced Budget with a focus on job creation, increased spending on infrastructure, reigning in the deficit, and bringing the economy back on track, experts said on Wednesday. Stock markets have been subdued in the run-up to the Union Budget with BSE's benchmark Sensex is almost flat so far this month. Even the corporate earning season failed to excite the markets, while some indices like IT and bankex have seen some positive movements.
After two months of buying, foreign portfolio investors (FPIs) have turned net sellers in October by pulling out Rs 12,278 crore from Indian markets. As per depositories data, FPIs took out Rs 13,550 crore from equities but invested Rs 1,272 crore in the debt segment during October 1-29. The total net outflow stood at Rs 12,278 crore during the period under review.
Market benchmark BSE Sensex rallied 635 points to 59,942 in the opening trade of the special Muhurat session on Monday to mark the beginning of Hindu Samvat year 2079. The 30-share index was trading higher by 635.12 points, or 1.07 per cent, at 59,942.27 in the first few minutes of trade. Similarly, the broader NSE Nifty surged 192.20 points or 1.09 per cent to 17,768.50.
Don't exit from growth-style funds as they may benefit next from a shift in investor preference.
If there was one event that made the month of August stand out, it was a strengthening of the dollar index to levels last seen only 20 years ago, as the Federal Reserve dispelled all doubts about its intention to continue raising interest rates. Predictably, most currencies suffered against the US unit, with the bulk of the losers belonging to the emerging markets pack. Amid the volatility, the rupee, however, has displayed significant resilience and fared much better than most of its peer currencies.
With exports on a downturn due to the economic crisis battering major markets in the US and EU, China has said it will turn to developing countries to sustain its foreign trade-dependent economic growth.
Moody's Investors Service on Monday said the bank capital will moderately fall in emerging Asia over the next two years, with India seeing larger capital decline without further infusion. In a report, Moody's said the uncertain trajectory of asset quality is one of the biggest threats for emerging market banks, as operating conditions remain challenging amid the current COVID pandemic.
Lump sum investments in equity and hybrid schemes of mutual funds (MFs) declined to Rs 17,900 crore in October - the lowest since January 2021. The fall in lump sum investments comes even as flows through systematic investment plans (SIPs) rose to a new all-time high of Rs 13,000 crore in October. The latest lump sum tally is just a third of the peak inflow of Rs 49,700 crore in July 2021.
Irdai on Friday extended the 'use and file' procedure for the most of the life insurance products, thereby allowing insurers to launch new products without prior approval of the regulator. This comes days after Insurance Regulatory and Development Authority of India (Irdai) extending similar relaxations to health insurance products as well as general insurance covers. In a press release, Irdai said that in its continuous endeavour towards the reform agenda taken up towards having a fully insured India, it has extended the 'use and file' procedure for most of the life insurance products.
Fitch Ratings on Tuesday retained India's economic growth forecast at 7 per cent for the current fiscal, but cut projections for the next two financial years saying the country is not impervious to global developments. In its December edition of the Global Economic Outlook, Fitch projected India's GDP to grow at 7 per cent in the current fiscal, at a slower rate of 6.2 per cent in 2023-24 and at 6.9 per cent in 2024-25. In September, Fitch projected 7 per cent growth for the current fiscal, followed by 6.7 per cent in 2023-24 and 7.1 per cent growth in 2024-25.
Amid the rupee declining against the US dollar, Finance Minister Nirmala Sitharaman on Thursday said the Indian currency is relatively better placed than other global currencies against the greenback. Emerging market currencies have been falling against the dollar amid geopolitical tensions in the wake of the Russia-Ukraine war, concerns over growth, high global crude prices, sustained inflation and central banks worldwide adopting hawkish monetary policy approach. "We are relatively better placed. We are not a closed economy. We are part of the globalised world.
'New record for the Nifty50 is only a question of when.'
Reserve Bank Governor Shaktikanta Das on Friday said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies. Days after the domestic currency breached the 80-level against the dollar, Das said Reserve Bank of India (RBI) has zero tolerance for volatile and bumpy movement in the rupee and added that the central bank actions have helped in smoother movement. He said RBI has been supplying US dollars to the market to ensure adequate supply of liquidity and also clarified that the central bank does not target a particular level for the currency.
The fall in total reserves was mainly because of a decline in foreign currency assets worth $4.5 billion, the data showed.
'The potential headwind is that the Indian economy is likely to see a slowdown in growth rates over the next two years.'
The failure of SVB was due to idiosyncratic reasons, but shows how higher rates can expose fault lines in unforeseen places, observes Neelkanth Mishra.
For the first time, the rupee declined to the low level of 80 against the US dollar in intra-day spot trading on Monday before ending the session 16 paise lower at 79.98 amid a surge in crude oil prices and unrelenting foreign fund outflows. At the interbank forex market, the local unit opened at 79.76 against the greenback but lost ground to touch the psychological low mark of 80 against the American currency. The local unit clawed back some lost ground and closed at 79.98, registering a fall of 16 paise over its previous close.
India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness, S&P Global Ratings said on Thursday. Speaking at the India Credit Spotlight 2022 webinar, S&P Sovereign & International Public Finance Ratings director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive. "The country has built up buffers against cyclical difficulties like those, which we are experiencing right now," Wood said.
Capital markets regulator Sebi has permitted mutual funds to again invest in foreign stocks within the aggregate mandated limit of $7 billion for the industry. This came in the wake of a major correction in global markets that brought down the valuation of international stocks. In January, Sebi had asked mutual fund houses to stop taking fresh subscriptions in schemes investing in overseas stocks. The directive to stop subscription was mainly on account of the mutual fund industry crossing the mandated limit of $7 billion for overseas investments.
'While the country has been hit hard from a strong second wave of Covid, we believe the markets are willing to look through that.'
In the absence of major domestic events, equity markets will be driven by global trends, foreign fund flows and movement in the Brent crude oil, analysts said. The major global events this week are the European Central Bank interest rate decision and China's inflation rate, they added. "Indian equity markets are outperforming most of their global peers and trying to show resilience despite weak global cues.
'Today, there is no easy money to be made after the run-up in equities.'
'Given the worries about sluggish growth, rising interest rates and likely volatility, it's quite logical to infer that the SIP route could be the preferred way of investing.'
They straddle many different (non-financial) lines of business with sometimes opaque overarching governance structures.
The global recovery is expected to be asynchronous and divergent between advanced and emerging market economies, the IMF said on Tuesday, noting that policymakers should take early action and tighten selected macroprudential policy tools while avoiding a broad tightening of financial conditions. "Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks," the International Monetary Fund (IMF) said in its Global Financial Stability report released ahead of the Spring meeting of the global lender and the World Bank. However, actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities, it said.
Indian rupee has declined by about 25 per cent since December 31, 2014, and is nearing 80 against the dollar, the Lok Sabha was informed on Monday. The value of the rupee declined from 63.33 against a dollar on December 31, 2014, to 79.41 on July 11, 2022, Finance Minister Nirmala Sitharaman said in a reply quoting RBI data. The exchange rate of the Indian Rupee against the dollar was Rs 78.94 per dollar as of June 30, 2022, Finance Minister Nirmala Sitharaman said in a written reply.
Foreign portfolio investors (FPIs) turned net buyers in October after being net sellers in the previous month. In October, FPIs bought shares worth nearly Rs 8,430 crore ($1 billion) against net selling of Rs 13,405 crore ($1.6 billion) in September. Positive flows during three of the previous four months have pushed the domestic markets towards fresh all-time highs. At present, the Sensex and Nifty are less than 2 per cent shy of breaching record highs logged in October 2021. A rally in equity markets in the US and Europe is in hopes that the Federal Reserve may go soft on rate hikes after its November meeting.
Addressing a symposium on the international situation and China's foreign relations in 2022, Wang said both countries have maintained communication through diplomatic and military-to-military channels.
Climate and sustainable development financing, multilateral institution reforms, regulation of digital assets, the spillover effect on developing economies from actions of western central banks, energy and food security in the backdrop of war in Europe, and sanctions on Russia and their impact on the global economy are some of the agenda items that India will take up as President of G-20, Finance Minister Nirmala Sitharaman said on Tuesday. India will take over as President of the powerful international grouping on December 1 for a year. There will be around 200 meetings throughout the country, with the summit Heads of State meeting expected to be held in New Delhi next September.
The International Monetary Fund (IMF) on Tuesday cut its economic growth forecast for India to 9.5 per cent for the fiscal year to March 31, 2022 as the onset of a severe second COVID-19 wave cut into recovery momentum. This forecast for 2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in April before the second wave took a grip. For 2022-23, IMF expects economic growth of 8.5 per cent, larger than the 6.9 per cent it had projected in April.
Global rating agency Moody's on Monday said the high commodity prices and supply chain disruptions due to further escalation in the Russia-Ukraine crisis could expose about 42 per cent of rated Indian companies to significant risks. They are mainly in the oil and gas and automotive sectors. The impact may be seen under two scenarios: first, revised base line and second being downside economic scenarios incorporating a global recession and a more severe liquidity squeeze, it said. The military conflict between Russia and Ukraine is impacting companies in Asia Pacific, adding to existing challenges from supply chain disruption and the coronavirus pandemic.
Leaders at the G20 summit on Wednesday called for an immediate end to the Ukraine conflict, holding that "today's era must not be of war", a formulation that echoed Prime Minister Narendra Modi's message to Russian President Vladimir Putin in September.
The deluge of offerings in the primary market, a muted results season and increasing talks of a Fed taper may quicken the pace of overseas investors selling Indian equities in the near term. The next few weeks may see a dozen companies tap the market for initial public offerings and raise about Rs 30,000 crore. These include the likes of Zomato, Glenmark Life Sciences, Utkarsh Small Finance Bank and Seven Islands Shipping.
Indian equity markets should be able to withstand inflation up to 8 per cent, said analysts at Credit Suisse Wealth Management in a recent note. Should the rate of inflation move higher than this, the valuation of Indian equities could deteriorate further, they cautioned. The fall from the peak levels has seen Nifty's 12-month forward price-to-earnings (P/E) ratio of 17.6 dip toward its 10-year and 5-year (pre-COVID) average of 16.9, which suggests that valuation froth of Indian equities has settled, said the Credit Suisse analysts.
Technology major Apple earned nearly one-third of its revenue from emerging markets and doubled its business in India and Vietnam in fiscal 2021, according to its CEO Tim Cook said. Apple posted a 29 per cent year-on-year growth in revenue at $83.4 billion in the fourth quarter ended September 25, 2021. Its net income stood at $20.55 billion in the said quarter as against $12.67 billion in the year-ago period.
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