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<ul><li>As effects of post-Covid reopening fades, India’s growth momentum could slow down next year, says a <keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> report. </li><li>CRISIL cut its Indian GDP growth forecast for FY23 to 7% from 7.3% earlier. </li><li>In November, Moody’s cut its India GDP growth forecast for 2022 to 7% from its earlier estimates of 7.7%. </li><li>RBI too revised its GDP growth rate estimates for FY23 to 7% from 7.2% earlier. </li></ul>India’s GDP growth will slow down in the next calendar year of 2023, says a note released by Goldman Sachs. It has slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per Goldman Sachs. “Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up,” said Goldman Sachs per a <a href="https://economictimes.indiatimes.com/news/economy/indicators/goldman-sachs-slashes-indias-gdp-forecast-for-2023-to-5-9/articleshow/95651040.cms">Bloomberg report</a>. Goldman Sachs expects the global economy to grow at 1.8%, as US resilience contrasts with a European recession, and a bumpy reopening in China. “Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war,” said a redacted version of Goldman Sachs report on November 16. In the second week of November, Moody’s too cut its India GDP growth forecast for 2022 to 7% from its earlier estimates of 7.7%. The <a href="https://economictimes.indiatimes.com/news/economy/indicators/moodys-cuts-2022-growth-forecast-for-india-to-7/articleshow/95445091.cms">rating agency has cited rising inflation</a> coupled with high interest rates and a slowing global economy as the reasons behind the same. However, Moody’s pegged India’s GDP growth rate at 4.8% for 2023 – much lower than that of Goldman Sachs’ report. On Monday, CRISIL cut its Indian GDP growth forecast for FY23 to 7% from 7.3% earlier. This agency too expects FY24 growth to slow down further to 6%. RBI too revises estimates CRISIL’s estimates are in line with RBI’s estimates which too revised its GDP growth estimates in September for the financial year 2022-23 from 7.2% to 7%. For the first quarter of FY23, India’s GDP grew at 13.5%. In spite of its double digit growth, it had missed many estimates, forcing agencies like SBI and Citibank to recalibrate their <a href="https://www.businessinsider.in/finance/news/rating-agencies-revise-gdp-growth-estimates-yet-again-most-now-peg-it-below-7/articleshow/93944018.cms#:~:text=it%20below%207%25-,Rating%20agencies%20revise%20GDP%20growth%20estimates%20yet%20again,now%20peg%20it%20below%207%25&amp;text=India's%20GDP%20growth%20for%20the,was%20released%20by%20the%20government.">estimates for the financial year</a> and the RBI was the latest to do so. “While the real GDP growth in the first quarter of this year turned out to be lower than expectations, nonetheless it was 13.5% and perhaps the highest among the major global economies," RBI governor Shaktikanta Das <a href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-50-bps-taking-it-to-a-three-year-high-of-5-9-das-says-inflation-at-alarmingly-high-levels/articleshow/94550429.cms">said</a> on September 30. Like most central banks around the world, India too has hiked base interest rates four times this financial year on account of rising inflation. The base interest rate rose cumulatively by 1.9%, and now stands at 5.9%. For the month of October, exports shrunk by 16.6%, while imports rose – expanding the country’s <a href="https://www.businessinsider.in/india/news/exports-shrink-by-16-6-to-29-78-bn-in-oct/articleshow/95532058.cms">current account deficit</a>. The retail inflation cooled to a <a href="https://www.businessinsider.in/finance/news/retail-inflation-eases-to-6-7-in-october-from-7-4-in-september/articleshow/95512476.cms">three-month low of 6.7%</a>, but was however above the RBI’s tolerance limit of 6%. Retail inflation had been above the RBI’s comfort zone for the last ten months. Q2 growth rate estimated at 6.5%: ICRA Apart from macroeconomic effects, India’s growth story is also affected by a myriad of factors including erratic monsoons and more. As per an ICRA report, India’s pace of economic growth is expected to halve in the second quarter, as compared to the first. As per the rating agency’s note, Q2 GDP growth is expected to be at around 6.5% – half of Q1 GDP growth. “Economic activity in Q2 FY2023 benefitted from robust demand for contact-intensive services, healthy capital spending by the Government of India (GoI) and pre-festive season stocking of goods. The downsides arose from the mixed crop output trends revealed by the advance estimates of kharif production, adverse input cost movements for certain sectors with a higher fuel intensity, as well as the impact of the flagging external demand on non-oil merchandise exports,” said the ICRA report. The contribution of agriculture to the nation’s growth is estimated at a modest rate of around 2.5% by ICRA for the quarter. “Untimely heavy rainfall in the North-west and Central India is likely to have added to the moisture levels of the standing crop, which poses some downside risks to the kharif output relative to first advance estimates,” the ICRA report said. However, ICRA’s estimates are slightly higher than that of the Reserve Bank of India’s estimates for the second quarter – at 6.3% in Q2; tapering further to 4.6% each in Q3 and Q4.

India's GDP growth forecast continues to see cuts

<ul><li>There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30, said SBI Ecowrap. </li><li>On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>shared that it now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. </li><li>India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per <keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword>. </li></ul>SBI Ecowrap has pegged India’s GDP growth rate for Q2 FY23 at 5.8%, much lower than the RBI’s estimate of 6.3%. The research report which was released late Monday, also said that this growth is shrouded in significant uncertainties. “There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30. Consensus estimates are at 6.1%. A range of 5.6%-6% is better than a point estimate,” the report said, which is using a new model to predict how the economy is growing, with a lag. As per its estimates of Q2 growth, its fiscal year growth estimates too stand at 6.8%, as compared to the popular consensus of 7%. “Overall, a sub 6% growth if it materialises in Q2, could imply that India is likely to have expanded at lower than the 7% benchmark. We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap. SBI’s commentary is in contrast to ICRA’s Q2 growth predictions that came on November 21, which pegs Q2 growth at 6.5% – half of the growth seen in Q1, but also ahead of RBI estimates. While the first quarter of FY23 exhibited double digit growth at 13.5%, it had missed estimates, sending many agencies to recalibrate their projections of the year. Apart from SBI and Citibank, RBI too had changed its annual growth estimates - leading many agencies to follow suit. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Giving an early view of India’s pace of growth is export data. Hit by a global slowdown, Indian exports for the month of October shrunk by 16.6% to $29.78 billion as compared to last year, according to the Commerce Ministry. Imports grew by 5.5%, widening India’s trade deficit. Goldman Sachs believes 2023 will be tougher Goldman Sachs, which provides estimates for calendar years as opposed to fiscal years, which believes the pace of growth will slowdown in 2023. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per Goldman Sachs. “Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up,” said Goldman Sachs per a <a href="https://economictimes.indiatimes.com/news/economy/indicators/goldman-sachs-slashes-indias-gdp-forecast-for-2023-to-5-9/articleshow/95651040.cms">Bloomberg report</a>. Goldman Sachs expects the <keyword id="11929899" type="General" weightage="20" keywordseo="global-economy" source="Orion">global economy</keyword> to grow at 1.8%, as US resilience contrasts with a European recession, and a bumpy reopening in China. “Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war,” said a redacted version of Goldman Sachs report on November 16. In the second week of November, Moody’s too cut its <keyword id="162607" type="General" weightage="20" keywordseo="india-gdp-growth" source="Orion">India GDP growth</keyword> forecast for 2022 to 7% from its earlier estimates of 7.7%. The <a href="https://economictimes.indiatimes.com/news/economy/indicators/moodys-cuts-2022-growth-forecast-for-india-to-7/articleshow/95445091.cms">rating agency has cited rising inflation</a> coupled with high interest rates and a slowing global economy as the reasons behind the same. However, Moody’s pegged India’s GDP growth rate at 4.8% for 2023 – much lower than that of Goldman Sachs’ report. SEE ALSO <a href="https://www.businessinsider.in/india/news/exports-shrink-by-16-6-to-29-78-bn-in-oct/articleshow/95532058.cms">Exports shrink by 16.6% to $29.78 bn in Oct</a> <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">S&amp;P cuts India's growth forecast to 7% for FY23</a>

No end to downgrades in GDP estimates as economists remain divided on severity of slowdown

<ul><li>Foreign institutional investors have pulled out nearly $7 billion from the Indian markets this year.</li><li>FIIs have been net buyers in only one month this financial year – September.</li><li>Nearly $13 billion worth of shares have been sold by FIIs so far, as opposed to inflows worth over $13 billion in the period last year.</li></ul>Foreign institutional investors (FIIs) have offloaded nearly $7 billion worth of shares in the last two months and since the beginning of the financial year, FIIs have sold nearly $13 billion worth of shares. During the financial year, only September has witnessed net buying from FIIs, that too only to the extent of $62 million. This comes at a time when the Nifty 50 index has gained nearly 20% since April. “Part of the reason FIIs are selling is because valuations are not cheap and the inflation risk is real in India while the Reserve Bank of India, which historically was one of the more vigilant central banks, right now seems to be more on the dovish side," said Arvind Sanger, managing partner, Geosphere Capital Management to <a href="https://economictimes.indiatimes.com/markets/expert-view/why-have-fiis-turned-big-sellers-in-the-indian-market-arvind-sanger-answers/articleshow/87904160.cms">Economic Times</a>. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#000000;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Month (2021) </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#000000;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Amount ($ billion) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">April </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-1.70 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">May </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-0.81 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">June </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-0.003 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">July </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-3.10 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">August </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-0.34 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">September </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">0.06 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">October </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-3.42 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">November </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-3.39 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Total </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">-12.70 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: NSE, as on November 26, 2021 During the financial year, the last two months have recorded nearly $7 billion worth of selling and November is on track to be the month with the highest selling. <div type="image" title="FIIs - 2020-21 vs 2021-22" msid="87927349" hostid="261" caption="&amp;lt;p&amp;gt;FII activity compared to last financial year.&amp;lt;/p&amp;gt;"></div> Some of the reasons for the pull out by FIIs include concerns around COVID-19, the inflation risk and US Federal Reserve’s plans to reduce the stimulus. If we look at some of the companies that have high <keyword id="46756" type="General" weightage="20" keywordseo="fii" source="Orion">FII</keyword> holdings, there has been a substantial withdrawal in the financial year, even without looking at the last two months. The following data does not factor in the heavy selling that has taken place in October and November. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FII holding as on March 31, 2021 </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FII holding as on September 31, 2021 </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#000000;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Decline </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Shriram Transport Finance Corporations </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">61% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">53.70% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-7.30% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ZEE Entertainment Enterprises Ltd </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64.20% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">57.20% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-7.00% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Fortis Healthcare </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">34.40% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">29.30% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-5.10% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Manappuram Finance </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">38.60% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">34.90% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.70% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Apollo Hospitals </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">54.50% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">51.50% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.00% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Redington India </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">42% </td><td style="border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">39% </td><td style="border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.00% </td></tr></tbody><tbody></tbody></table> Note: Data till September 2021 Morgan Stanley last month <a href="https://www.cnbctv18.com/economy/morgan-stanley-downgrades-india-to-equal-weight-from-overweight-citing-expensive-valuations-11263672.htm">downgraded</a> Indian equities to equal-weight from overweight citing expensive valuations. "We move tactically equal weight on India equities after strong relative gains - we expect a structural multi-year earnings recovery, but at 24 times forward price to earnings, we look for some consolidation ahead of Fed tapering, an RBI (rate) hike in February and higher energy costs," the investment banking company said. Similarly, Goldman Sachs downgraded the Indian market from overweight, stating that the recovery has already been priced in. “While we expect strong cyclical and profit recovery next year and remain medium-term constructive amid increasing digitalisation in the index, we think the recovery is well priced at current peak valuations. We, thus, take profits on our India overweight and lower it to market weight within our regional allocations,” it <a href="https://economictimes.indiatimes.com/markets/stocks/news/goldman-sachs-downgrades-india-equities-says-stocks-appear-well-priced-for-now/articleshow/87660109.cms">said</a>. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/global-investment-banks-are-telling-their-clients-to-take-profits-from-india/articleshow/87667322.cms">Small investors ahoy! Global investment banks are telling their clients to take profits from India</a> <a href="https://www.businessinsider.in/stock-market/markets/news/tata-motors-maruti-and-hdfc-are-among-the-top-losers-as-fear-of-the-new-covid-variant/articleshow/87923451.cms">Biggies like Tata Motors, Maruti, and HDFC are among top losers as fear of new COVID variant takes the wind out of Indian stocks</a> <a href="https://www.businessinsider.in/stock-market/news/pvr-inox-mainland-china-barbeque-nations-share-price-falls-due-to-new-covid-19-variant/articleshow/87925164.cms">Shares of PVR, INOX, Burger King, Barbeque Nation tumble as investors panic over the new COVID-19 variant</a>

Foreign investors have pulled out nearly $7 billion in the last two months, and over $12 billion since April this year

<ul class="summary-list"><li>India's Prime Minister Narendra Modi had his power pegged back in elections this week. </li><li>It was also the 35th anniversary of the Tiananmen Square massacre in China. </li></ul><a target="_blank" href="https://www.businessinsider.com/narendra-modi-won-already-seeing-cost-him-allies-cabinet-funding-2024-6">Narendra Modi's strongman ambitions</a> suffered a setback this week.His Bharatiya Janata Party (BJP) party fell<a target="_blank" href="https://www.businessinsider.com/narendra-modi-win-bjp-india-election-explained-2024-6"> short of the landslide victory </a>many had predicted in the Indian elections.As Modi becomes India's prime minister for a third time, his party will have to enter into a power-sharing agreement with alliance partners.It's a chastening lesson from the Indian electorate for Modi, who, while boosting India's global standing, has been accused of stoking division and weakening India's democracy.On the same day as the Indian election results, <a target="_blank" href="https://www.state.gov/on-the-35th-anniversary-of-tiananmen-square/">the world marked the 35th anniversary </a>of the June 4, 1989 Tiananmen Square massacre, which saw a brutal crackdown on pro-democracy protesters in Beijing.In the decades since, China has slid back into Maoist-style authoritarianism.The events this week highlighted how the competition between India and China is about more than raw power. It's also a competition between two very different political ideologies.<h2 id="6acd91a8-36b3-408f-85c1-259d5944f4e0">India is a flawed but thriving democracy</h2>India is the world's largest democracy. Its first elections were held in 1951-52 after it gained independence from Britain. Free elections have been held in nearly every election cycle since, with a coup in 1975 briefly threatening India's democratic status.It is a rare bright spot in a world where democracy seems to be in retreat. Even in the US, the global champion of democracy, former president Donald Trump is accused of launching an attempt to cling to power illegally after losing the 2020 election.<div type="image" title="Indian voters" height="683" width="1024" msid="110819479" hostid="261" sizebytes="88454"></div>"India isn't a perfect democracy but it is still a role model for developing nations, large or small. And given trends in some Western democracies, I would have to say that there are several things they, too, should be learning from India," said Jabin T. Jacob, an expert on India-China relations at Shiv Nadar University, India.India's democracy, though, faces a stern test under Modi, say critics. Global democracy watchdog <a target="_blank" href="https://www.bbc.co.uk/news/world-asia-india-56393944">Freedom House in 2021</a> downgraded India's democratic status, saying Modi's Hindu nationalist movement had menaced journalists, attacked Muslims, and corroded civil liberties.Jacob said this week's results showed India's democracy remained resilient despite the pressures, while dealing a blow to a leader seen to have overstepped his authority."We have just seen an election in which the Indian electorate decided that their interests are best served by power shared more evenly among a set of political formations that represent diverse interests and aspirations. That is the essence of democracy," he said."The Indian electorate is a very mature one, and it has always intervened in a timely fashion against authoritarian tendencies in its rulers."It's unclear whether Modi will now double down on the nationalism he's championed or seek a more moderate path based on economic reform.<h2 id="c1fe728e-200a-4edb-8d77-94ea6111c952">China's rise comes at a high cost</h2>There are those in India, though, <a target="_blank" href="https://www.ft.com/content/daa87f88-ae0e-11e3-974d-00144feab7de">who have been astonished</a> at the speed and efficiency of China's rise to economic superpower status.China has become the world's second-largest economy, and the lives of millions of ordinary Chinese people have been transformed. Though India has made huge economic progress under Modi, it still lags behind.<div type="image" title="China high speed rail" height="644" width="1024" msid="110819477" hostid="261" sizebytes="117068"></div>"Perhaps the greatest challenge democracy faces in India is that is has failed to deliver the kind of sustained economic development enjoyed by neighbors like China over the last four decades. It has also failed to eliminate extreme poverty," wrote Chatham House <a target="_blank" href="https://www.chathamhouse.org/2022/04/democracy-india">analyst Gareth Price in 2022.</a>But with prosperity in China, has come reduced freedom.Since Tiananmen Square 35 years ago, China's Communist Party has rolled back many of the freedoms its citizens once had.Its current leader, Xi Jinping, has imposed a draconian surveillance state and is considered <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-ai-wreak-havoc-america-world-economy-2024-6">China's most authoritarian ruler</a> since Mao Tse Tung.Dominic Chiu, an analyst with the Eurasia Group, told Business Insider that China's system had given it an economic advantage — but at a cost."China's one-party rule in the reform era enabled consistent long-term policymaking and economic planning," he said. "This benefited China's economy immensely when the leadership decided to liberalize markets, privatize industries, and open the country up to foreign investment." But, he said, China's repressive one-party system was also deterring investors. And with China's <a target="_blank" href="https://www.businessinsider.com/china-falls-out-of-love-with-natural-diamonds-industry-struggles-2024-6">economy experiencing a steep </a>downturn, this poses a serious problem for its future growth.<h2 id="ebafe111-fa5e-49b8-95d3-f92a674d0da2">China and India vie for dominance</h2>Having achieved economic superpower status, China is now seeking to assert its power more aggressively both regionally and internationally.Tensions with India are increasing. In 2020, clashes along the countries' Himalayan border resulted in the death of 20 Indian soldiers and four Chinese.<div type="image" title="India-China border" height="683" width="1024" msid="110819475" hostid="261" sizebytes="158650"></div><a target="_blank" href="https://uk.news.yahoo.com/modi-mission-assert-indias-global-123002908.html">Analysts told BI</a> that building stronger alliances to counter Chinese aggression will be one of the core aims of Modi's third term.And its commitment to democracy hands it an important advantage, said Jacob."India's democratic status is critical for its international standing. It is an opportunity to develop a model of economic and political development that is both equitable and democratic and thus distinct from the aggressive capitalism of the US or the authoritarianism of the PRC," he said.In 2021, India entered<a target="_blank" href="https://uk.news.yahoo.com/modi-went-straight-reelection-needling-103142130.html"> into the "Quad" partnership </a>with democracies the US, Japan, and Australia, to counter what is perceived as growing Chinese aggression in the Pacific and Indian Ocean.It's a political alliance that would've been more difficult to broker if India was ruled by an authoritarian government,<a target="_blank" href="https://www.brookings.edu/articles/democracy-and-the-us-india-relationship/"> say observers.</a><h2 id="b9b7d5ac-0c25-43f4-adf2-9128d9242020">Competing nationalist visions</h2>Some analysts, though, say that the competition between India and China is not, at its core, about competing political systems but about competing nationalist visions.According to this interpretation, both Xi and Modi are committed to restoring what they see as their nation's rightful place at the top of the global order.But in his quest to strengthen India, critics are warning Modi not to undermine the commitment to democracy and pluralism they believe is at the heart of its post-independence success.Jacob said those in India jealous of China's economic might should look more closely at the reality."Indians who argue against democracy using the China comparison clearly don't understand anything about the reality of China and the Chinese people," he said.

The competition between India and China is about more than raw power

<ul class="summary-list"><li>US stocks declined on Thursday after a slate of fresh economic data.</li><li>PPI in February climbed 0.6%, more than the 0.3% Dow Jones forecast.</li></ul>US stocks declined on Thursday as <a href="https://markets.businessinsider.com/news/stocks/stock-market-news-today-indexes-retail-sales-inflation-economic-data-2024-3?_gl=1*1gqfiix*_ga*MjA5NTAyMzYyOS4xNjYyNDcwMDc5*_ga_E21CV80ZCZ*MTcxMDQ0MjQ3NC4xNzM3LjEuMTcxMDQ0MzUyMy4wLjAuMA..&amp;utm_source=copy-link&amp;utm_medium=referral&amp;utm_content=topbar">investors took in a hot inflation reading</a> and the latest retail sales data for February. Stocks dropped as Treasury yields edged higher. The 10-year government bond yield jumped 10 basis points to 4.296%. The producer price index in February accelerated 0.6%, more than the 0.3% gain expected by Dow Jones economists. Much of the surge can be attributed to a spike in energy prices, which tend to be more volatile and which Federal Reserve officials look at less than other goods and services inflation. Earlier in the week, the February CPI report also came in hotter-than-expected with a 3.2% increase compared to the same time last year. Together the data adds a wrinkle in the immaculate disinflation narrative and complicates the outlook for the Fed's rate cut timing.Futures markets aren't expecting any change to the benchmark rate at this month's Fed meeting, but they see about 60% odds the central bank cuts by 25 basis points in June, per <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME's FedWatch Tool</a>."For the data-dependent Fed, this report isn't helpful for a market that demands a 2024 rate cut," said Quincy Krosby, chief global strategist for LPL Financial. Meanwhile, retail sales in February increased by 0.6% on a seasonally adjusted basis. That's below Dow Jones' forecast for a 0.8% jump but marks a rebound from January when sales fell 0.8%. The release showed motor vehicle sales rebounded 1.6% in February compared to January, in addition to small upticks in restaurant spending."The consumer has a bit more capacity to spend but the consistent downward revisions should tell us the economy is slowing," Jeffrey Roach, chief economist for LPL Financial, wrote in a note. "A helpful indicator to watch in the coming months is auto sales. If the economy is truly slowing, expect to see vehicle inventories swell and dealers offer more incentives."Here's where US indexes stood as the market closed at 4:00 p.m. on Thursday: <ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,150.48, down 0.29% </li></ul><ul><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 38,905.66, down 0.35% (-137.66 points)</li></ul><ul><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq Composite</a>: 16,128.53, down 0.3%</li></ul>Here's what else is going on: <ul><li>MicroStrategy's massive debt-fueled bitcoin purchases could <a href="https://markets.businessinsider.com/news/currencies/microstrategy-bitcoin-acquisition-debt-crypto-rally-price-high-downturn-pullback-2024-3">make a future downturn worse</a>, according to JPMorgan.</li><li>Dogecoin rallied after Elon Musk said <a href="https://markets.businessinsider.com/news/currencies/elon-musk-dogecoin-price-tesla-crypto-bitcoin-rally-doge-meme-2024-3">the token could someday pay for Teslas</a>.</li><li>India imported <a href="https://markets.businessinsider.com/news/commodities/russia-economy-oil-energy-exports-india-imports-revenue-sanctions-discount-2024-3">420,000 fewer barrels of Russian oil</a> per day in February. </li><li>Wells Fargo said Tesla stock could drop 23% in a <a href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-drop-outlook-growth-earnings-production-fsd-profits-2024-3">new downgrade</a>.</li><li>One market veteran said <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ed-yardeni-predicts-6500-sp500-through-2026-2024-3">stocks could gain another 26%</a> through 2026.</li><li>We now know <a href="https://markets.businessinsider.com/news/currencies/bitcoin-inventor-satoshi-nakamoto-cryptocurrency-price-craig-wright-outlook-investors-2024-3">who Satoshi Nakamoto is not</a>. </li><li>A huge wave of <a href="https://www.businessinsider.com/housing-market-outlook-home-inventory-mortgage-lock-in-real-estate-2024-3">housing inventory</a> hit the market in February. </li></ul>In commodities, bonds, and crypto: <ul><li>Oil prices climbed, with<a href="https://markets.businessinsider.com/commodities/oil-price?type=wti"> West Texas Intermediate</a> up 1.72% to $81.09 a barrel. <a href="https://markets.businessinsider.com/commodities/oil-price?utm_medium=ingest&amp;utm_source=markets">Brent crude</a>, the international benchmark, moved higher 1.40% to $85.19 a barrel. </li><li><a href="https://markets.businessinsider.com/commodities/gold-price?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Gold</a> edged lower 0.66% to $2,166.50 per ounce.</li><li>The<a href="https://markets.businessinsider.com/rates/u-s--rates-10-years?utm_medium=ingest&amp;utm_source=markets"> 10-year Treasury yield</a> climbed 10 basis point to 4.296%.</li><li><a href="https://markets.businessinsider.com/currencies/btc-usd?utm_medium=ingest&amp;utm_source=markets">Bitcoin</a> dipped 6.03% to $68,710.</li></ul>

Stock market today: US stocks tumble as bond yields jump after hotter-than-expected inflation data

The rupee appreciated 8 paise to 81.60 against the US dollar in early trade on Tuesday as foreign capital inflows and a firm trend in the domestic equity market boosted investor sentiments. Besides, a weak American currency in the overseas market helped the local unit, forex dealers said. At the interbank foreign exchange, the domestic unit opened strong at 81.58 against the dollar, then inched lower to quote at 81.60, registering a rise of 8 paise over its previous close. In the previous session on Monday, the rupee rose 3 paise to end at 81.68 against the dollar. The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.38 per cent to 106.28. Brent crude futures, the global oil benchmark, surged 1.39 per cent to USD 84.35 per barrel. In the domestic equity market, the 30-share <keyword id="53232" type="General" weightage="80" keywordseo="bse-sensex" source="Orion">BSE Sensex</keyword> was trading 164.06 points or 0.26 per cent higher at 62,668.86. Similarly, the broader <keyword id="372424" type="General" weightage="80" keywordseo="nse-nifty" source="Orion">NSE Nifty</keyword> rose 59.10 points or 0.32 per cent to 18,621.85. <keyword id="6438315" type="General" weightage="80" keywordseo="foreign-institutional-investors" source="Orion">Foreign Institutional Investors</keyword> (FIIs) were net sellers in the capital markets on Monday as they sold shares worth Rs 935.88 crore, according to exchange data. <keyword id="3414353" type="General" weightage="20" keywordseo="sp-global-ratings" source="Orion">S&amp;P Global Ratings</keyword> on Monday cut <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword>'s economic growth forecast for the current fiscal year to 7 per cent but said the domestic demand-led economy will be less impacted by the global slowdown. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/rishi-sunak-reiterates-uks-commitment-to-fta-with-india/articleshow/95844287.cms">Rishi Sunak reiterates UK's commitment to FTA with India</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/no-end-to-downgrades-in-gdp-estimates-as-economists-remain-divided-on-severity-of-slowdown/articleshow/95847763.cms">No end to downgrades in GDP estimates as economists remain divided on severity of slowdown</a>

Rupee gains 8 paise to 81.60 against US dollar

<ul><li>Global ratings agency <keyword id="125045" type="CITY" weightage="20" keywordseo="Fitch-Ratings">Fitch Ratings</keyword> has downgraded <keyword id="42747" type="CITY" weightage="20" keywordseo="Tata-Motors">Tata Motors</keyword> with a negative outlook. </li><li>The ratings come in because of Tata Motors Limited’s weak sales in India and the continued sluggish sales from <keyword id="6354362" type="ORGANIZATION" weightage="20" keywordseo="Jaguar-Land-Rover">Jaguar Land Rover</keyword>.</li><li>Earlier in June, Moody’s too had downgraded Tata Motors.</li></ul>Another ratings agency has downgraded Tata Motors to ‘BB-’ with a negative outlook. Fitch Ratings has downgraded the automaker as with lesser chances of “TML's profitability and free cash generation in the next two to three years”. Tata Motors is impacted due to its UK-owned subsidiary Jaguar Land Rover, which has become a white elephant for the company. “Uncertainty around an orderly outcome of Brexit negotiations and the evolving global tariffs situation pose risks, in particular to TML's JLR business, which faces a significant level of production-sales mismatch due to concentration of its production base in the UK,” said the report. In addition to JLR related troubles, Tata Motors’ domestic business is also troubled by a general slowdown in the auto market. Tata Motors too has been witnessing a slowdown in its sales in India, as has been the case with the Indian auto market. In June 2019, Tata Motors <a href="https://www.moneycontrol.com/news/business/companies/tata-motors-global-sales-dip-5-in-june-4195251.html">reported </a>a 14% decline in India sales, while a 5% drop was seen in global sales. Cumulatively, Tata Motors sales in the first quarter of 2019-20 fell by 20%. A month back, credit rating agency Moody’s had downgraded Tata Motors with a negative outlook. Tata Motors’ <a href="https://www.moneycontrol.com/news/business/markets/tata-motors-slips-3-on-moodys-downgrade-4122961.html">shares</a> fell 3% after the downgrade. The Fitch Ratings report mentioned that another reason for its downgrade was that “JLR faces elevated risks.” Jaguar Land Rover’s global sales continued to decline in May with the company reporting a 12% dip in <a href="https://www.moneycontrol.com/news/business/jaguar-land-rover-global-sales-dip-12-in-may-4086381.html">May 2019.</a> In June 2019, its sales dropped by 9.6% year-on-year. Brexit, US-China trade war and <a href="https://economictimes.indiatimes.com/markets/stocks/news/tata-motors-mulls-selling-stake-in-jlr-agencies/articleshow/68216938.cms">signs</a> of a slowdown in the global economy could be the reasons for the losses incurred by JLR. China has traditionally been one of the biggest markets for the luxury car. JLR's sales volumes in China too massively by 29% year-on-year in the first quarter of FY20.

Tata Motors downgraded again, thanks to slow India business and ‘elevated risks’ from Jaguar Land Rover

New Delhi, Jun 2 () The downgrade of India's sovereign rating by Moody's has not come as a surprise as global rating agencies have lowered ratings and outlook of about 21 emerging economies following COVID-19 outbreak, SBI said in a report on Tuesday. India's sovereign rating was downgraded by Moody's to Baa3 with a negative outlook on the pretext of prolonged period of slower growth, rising debt and stress in financial system. Apart from sovereign rating downgrade, Moody's has taken rating actions on 11 Indian banks. "...It seems that the downgrade was not completely unexpected. This is clearly visible in the data that market is not yet impacted by the rating downgrade. BSE Sensex and NSE Nifty rose and even Rupee appreciated against the US Dollar. "...India has not been alone to witness rating downgrade. So far around 21 emerging and developing countries have registered either a rating and/ or outlook downgrade by the agency. This does not come as a total surprise as emerging markets are always more susceptible to rating downgrades compared to developed economies in times of stress even if some of them have very low debt to GDP ratio," SBI in its research report 'Ecowrap' said. The rating action, the report said, was no reflection on the ability of the Indian government to service its debt obligations. "The sovereign external debt comprises around 20 per cent of the total external debt. The current level of foreign exchange reserves are sufficient to meet any debt obligations," the report added. The downgrade was unlikely to result in any immediate repercussions on exchange rates and bond spreads immediately on India offshore bonds, the report said, adding "...we need to be careful that we remain in investment grade and continue to give growth a big push through policy measures". It further said that in the current situation in India both the key interest rate and GDP are expected to fall further. "Our nominal GDP growth is likely to contract and based on this our interest-growth differential may turn positive also. Further, if interest rates are higher than expected, then the cost of rolling over a given debt increases," the report said. There have been studies which show that if the difference between interest rate and nominal growth rate is negative then there is no level of debt which is unsustainable, i.e. the government can borrow easily. The report also suggested that the government should only think of such interest-growth differential and not slippage in fiscal deficit. NKD CS BAL

Moody's rating downgrade not surprising: SBI report

Moody's Investors Service on Monday downgraded India's sovereign credit rating for the first time in more than two decades, saying policymakers will be challenged to mitigate risks of <keyword id="1032787" type="PERSON" weightage="20" keywordseo="low-growth">low growth</keyword>, deteriorating fiscal position and <keyword id="9329640" type="UNKNOWN" weightage="20" keywordseo="financial-sector-stress">financial sector stress</keyword>. Downgrading India's rating by a notch to 'Baa3' from '<keyword id="2556110" type="COMPANY" weightage="20" keywordseo="Baa2">Baa2</keyword>' assigned in November 2018, Moody's estimated India GDP shrinking by 4 per cent -- first full fiscal contraction in more than four decades, as the country faces a prolonged period of slower growth. Accordingly, India's foreign-currency and local-currency long-term issuer ratings have been downgraded to Baa3 from Baa2. India's local-currency senior unsecured rating too has been lowered to Baa3 from Baa2, and its short-term local currency rating to P-3 from P-2. The outlook remains negative. "The decision to downgrade India's ratings reflects Moody's view that the country's policymaking institutions will be challenged in enacting and implementing policies, which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector," Moody's said. 'Baa3' rating is the lowest investment grade -- just a notch above 'junk' status. Moody's had last downgraded India's rating in 1998. The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength than Moody's currently projects, it added. Moody's said slow reform momentum and constrained policy effectiveness have contributed to a prolonged period of slow growth, compared to India's potential, that started before the COVID-19, and it expects this to continue well beyond the <keyword id="43587" type="ORGANIZATION" weightage="20" keywordseo="pandemic">pandemic</keyword>. Moody's said India faces a prolonged period of slower growth relative to the country's potential, rising debt, further weakening of debt affordability and persistent stress in parts of the financial system, all of which policymaking institutions will be challenged to mitigate and contain. The agency said its upgrade of India's ratings to Baa2 in November 2017 was based on the expectation that effective implementation of key reforms would strengthen sovereign's credit profile through a gradual but persistent improvement in economic, institutional and fiscal strength. "Since then, implementation of these reforms has been relatively weak and has not resulted in material credit improvements, indicating limited policy effectiveness," Moody's said. It said the decision to downgrade India's rating was taken in the context of the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> pandemic, but was "not driven" by the impact of the pandemic. Rather COVID-19 pandemic amplifies vulnerabilities in India's credit profile that were present and building prior to the shock, and which motivated the assignment of a negative outlook last year. "Although a rating upgrade is unlikely in the near future, Moody's would change the outlook on India's rating to stable if outturns and policy actions were to raise confidence that real and nominal growth will rise to sustainably higher rates than Moody's projects, including through measures which enhance financial stability by strengthening the supervision, regulation and capitalisation of the financial sector. "Commensurate action to halt and reverse the rise in the debt trajectory, even slowly, would also support a stable outlook. Further, evidence that self-reinforcing economic and financial risks are rising would put downward pressure on the rating," Moody's said. Real GDP growth has declined from a high of 8.3 per cent in fiscal 2016 (ending March 2017) to 4.2 per cent in fiscal 2019. Moody's expects India's real GDP to contract by 4 per cent in fiscal 2020 due to the shock from the coronavirus pandemic and related lockdown measures, followed by 8.7 per cent growth in fiscal 2021 and closer to 6 per cent thereafter. Two other global rating agencies -- S&amp;P and Fitch -- too has projected Indian economy to shrink by 5 per cent in the current fiscal. The rating downgrade brings Moody's sovereign rating on India on par with S&amp;P and Fitch, which rate India at 'BBB-', the lowest investment grade. Thereafter and over the longer term, growth rates are likely to be materially lower than in the past, due to persistent weak private sector investment, tepid job creation and an impaired financial system. In turn, a prolonged period of slower growth may dampen the pace of improvements in living standards that would help support sustained higher investment growth and consumption. "While the government responded to the growth slowdown prior to the coronavirus outbreak with a series of measures aimed at stimulating domestic demand, and recently announced a support package aimed at supporting India's most vulnerable households and small businesses, Moody's does not expect that these measures will durably restore real GDP growth to rates around 8 per cent, which had seemed within reach just a few years ago," the US-based rating agency said. Moody's does not expect the credit crunch in India's undercapitalised financial sector to be resolved quickly. In turn, subdued growth further challenges the banking system's incomplete resolution of legacy non-performing assets and governance reforms, and is likely to further weaken asset quality and the health of banks as well as NBFIs. It said India's debt burden, which was 72 per cent of GDP in fiscal 2019, will rise to 84 per cent of GDP in 2020. Measures to improve India's fiscal strength, which were at the heart of the government's policy framework a few years ago, have "underwhelmed". Fiscal performance in recent years has been weaker than expected, with fiscal deficit targets consistently missed and a persistent lack of clarity on how medium-term fiscal consolidation objectives would be achieved, the agency said. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/small-businesses-with-good-turnover-can-now-be-listed-and-the-indian-government-will-buy-the-shares/articleshow/76136857.cms" data-type="tilCustomLink">Small businesses with ‘good turnover’ looking to get listed on the stock market will have the Indian government will buying their shares</a> <a href="https://www.businessinsider.in/tech/news/bhim-app-left-aadhaar-cards-pan-numbers-and-biometric-information-exposed/articleshow/76135419.cms" data-type="tilCustomLink">CSC BHIM site left Aadhaar cards, PAN numbers, and biometric information exposed — could be used to carry out financial fraud and identity theft, says report</a>

Moody's downgrades India's rating first time in over 2 decades, says GDP to shrink by 4% in FY21

Happy hump day. Phil Rosen here. By now I'm sure you've read plenty about a potential US default, but there's some nuance worth delving into here, regardless of whether lawmakers agree to raise the debt ceiling. Today we're talking about faith, creditworthiness, and the <a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5">sheer size of the American bond market</a>.If this was forwarded to you, <a href="https://www.businessinsider.com/subscription/newsletter/10-things-opening-bell">sign up here</a>. Download Insider's app <a href="https://www.insider.com/app">here.</a><a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5"></a>1. Let's get one thing straight: If we avoid a <a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">worst-case scenario</a> of a national default, that doesn't exactly put the country in the clear.President Joe Biden and House Speaker Kevin McCarthy this week have voiced optimism on a deal being reached, so credit agencies like Moody's, Fitch, and S&amp;P Global have so far stayed the course with <a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">an upbeat outlook</a>, too. But in another possible scenario, the government could keep making bond payments, but <a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">skip out on other obligations</a> like payments to government contractors or social security recipients. So just because the US skirts a traditional bond default doesn't mean it's out of the woods in regard to potential damage to its creditworthiness. In March, Republican lawmakers floated the idea of "prioritizing debt," or paying off certain obligations ahead of others. Janet Yellen cautioned that this approach would simply be a "<a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">default by another name</a>."Should the government go down this path, Fitch has indicated that the country's credit status could actually still be <a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">downgraded from its current top-notch AAA rating</a>. Here's the kicker: the US's creditworthiness is critical to the risk-free reputation of its Treasury market, and the world's faith in the American economy. The fear is that a downgrade could send investors <a href="https://markets.businessinsider.com/news/bonds/us-credit-rating-aaa-bond-payments-debt-obligations-crisis-default-limit-2023-5">fleeing the world's largest debt market</a>, driving up borrowing costs for the government and, in turn, households and businesses. To me, that sounds like bad news. But according to Josh Lipsky at the Atlantic Council, the reality is investors around the world <a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5">don't have an alternative to American bonds</a>."The problem for any investor <a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5">looking for safety</a> in the wake of a US default," Lipsky wrote in a Tuesday report from the think tank, "is that the US Treasury market is much larger than any similarly-rated government bond market."Sure, German bonds offer safety, as they're the only other AAA-rated debt issuer among G7 nations, but the German debt market is one-tenth the size of America's.Lipsky concludes that there's <a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5">no other safe place for investors to park their cash</a>, which makes politicians' current standoff all the more maddening. Because, as he puts it:"The US government issues something the rest of <a href="https://markets.businessinsider.com/news/bonds/investors-debt-default-mccarthy-biden-debt-bonds-america-atlantic-council-2023-5">the world desperately wishes it had</a>."What's your outlook now on a potential US default? Tweet me (<a href="https://twitter.com/philrosenn" target="_blank" rel="noopener">@philrosenn</a>) or email me (prosen@insider.com) to let me know.In other news:<a href="https://markets.businessinsider.com/news/stocks/housing-market-price-gap-miami-local-california-real-estate-redfin-2023-5"></a><div type="image" title="Miami housing market" height="1936" width="3871" msid="100474435" hostid="261" sizebytes="963826"></div>2. US stock futures fall early Wednesday, as investors closely eye debt-ceiling talks and wait for the Fed to release the minutes from the FOMC meeting held on May 2-3. <a href="https://markets.businessinsider.com/premarket?nr_email_referer=1&amp;utm_source=Sailthru&amp;utm_medium=email&amp;utm_content=Opening_bell&amp;utm_campaign=Post%20Blast%20%20:%20The%20stock%20market%20is%20going%20to%20be%20trading%20flat%20as%20long%20as%20risk-free%20assets%20offer%20much%20more%20yield&amp;utm_term=10%20THINGS%20BEFORE%20THE%20OPENING%20BELL%20SEND%20LIST">Check out the latest market moves</a>.3. Earnings on deck: Amazon, NVIDIA, and BlackRock, all <a href="https://markets.businessinsider.com/earnings-calendar">reporting</a>.4. Goldman Sachs recommended 30 cheap stocks that could begin to outperform in a slowing economy. These inexpensive names have stable earnings growth and offer promise even in a downturn. <a href="https://www.businessinsider.com/investing-cheap-stocks-to-buy-economy-earnings-growth-goldman-sachs-2023-5">See the full list</a>.5. Russia's looking to India for help in avoiding a financial black list. The warring nation warned that oil and weapons deals could be at risk if it ends up on an FATF list just like North Korea, Iran, and Myanmar. <a href="https://markets.businessinsider.com/news/stocks/russia-india-fatf-black-list-oil-weapons-economic-deals-sanctions-2023-5">Full details</a>.6. Tech stocks are the only game in town right now. DataTrek Research views the red-hot sector as the most promising corner of the market, as it's gained 27% since January. <a href="https://markets.businessinsider.com/news/stocks/tech-stocks-outlook-sp500-forecast-fed-interest-rates-inflation-2023-5">If you subtract tech names, the S&amp;P 500 would only be up 2.5% in 2023</a>.7. The housing market has become so local that the price-growth gap between Miami and San Francisco is nearing 30-year highs. Compared to a year ago, homes in the Bay Area are down 10.1% in price, while those in South Florida are up 10.9%. <a href="https://markets.businessinsider.com/news/stocks/housing-market-price-gap-miami-local-california-real-estate-redfin-2023-5">Still, San Francisco's median sale price remains 2.9 times higher than Miami's.</a>8. A 27-year-old started "Airbnb arbitrage" after getting laid off during the pandemic. He explained how he got his first rental with $6,400 upfront — <a href="https://www.businessinsider.com/how-to-make-money-succeed-airbnb-rental-arbitrage-2023-5">and scaled to 25 units in less than two years</a>.9. The chief investment strategist at Citi Global Wealth laid out the top three opportunities in tech stocks being "left behind" by investors chasing the AI boom. As names in the artificial intelligence sector take center stage, it'll be easy to overlook certain parts of the market that are also set to benefit. <a href="https://www.businessinsider.com/stock-market-artificial-intelligence-investing-ideas-tech-ai-opportunities-chatgpt-2023-5">Read more</a>.<a href="https://markets.businessinsider.com/news/stocks/yelp-stock-price-report-indicates-activist-investor-calls-for-sale-2023-5"></a><div type="image" title="Yelp stock price on May 24, 2023" height="1040" width="1126" msid="100474436" hostid="261" sizebytes="33590"></div>10. Yelp stock rallied on Tuesday after an activist investor reportedly called on the board for a potential sale. TCS Capital said the company could rake in nearly double the current share price, per the Wall Street Journal. <a href="https://markets.businessinsider.com/news/stocks/yelp-stock-price-report-indicates-activist-investor-calls-for-sale-2023-5">On the news, the stock saw its biggest single-day jump since August</a>.Curated by Phil Rosen in New York. Feedback or tips? Tweet <a href="https://twitter.com/philrosenn" target="_blank" rel="noopener">@philrosenn</a> or email <a href="mailto:prosen@insider.com" target="_blank" rel="noopener">prosen@insider.com</a>.Edited by Max Adams (<a href="https://twitter.com/maxradams?lang=en" target="_blank" rel="noopener">@maxradams</a>) in New York and Hallam Bullock (<a href="https://twitter.com/hallam_bullock" target="_blank" rel="noopener">@hallam_bullock</a>) in London.

Here's why the US could still be considered in default even if it keeps paying its debt

<ul><li>This is another case of a marquee private bank in India falling from grace amidst rising bad loans. </li><li>IndusInd Bank slumped over 7% after UBS downgraded stock to ‘Sell’ </li><li>The global investment bank said the credit risks are higher than expectations.</li></ul> The shares of IndusInd Bank slipped by over 7% at one point on Thursday after global investment bank UBS downgraded its stock to ‘sell’ and said that the credit risks may be more than twice as high compared to the company’s guidance. “The downside risk to IndusInd Bank’s earnings exists as believe credit costs could be higher at 150 basis points as compared to the company’s guidance of 65 basis points in 2019-20,” UBS said in its report on June 12. Business Insider <a href="https://www.businessinsider.in/indusind-bank-bad-loan-impact-from-ilfs-crisis/articleshow/69557477.cms">reported on May 31</a> that IndusInd Bank had made the same mistake as many other Indian banks trying to downplay the worst of its problems. What’s worse, according to UBS, there could be surprises. “Retail deposits, as a percentage of external liabilities for IndusInd is the lowest among banks in our coverage, at around 20%, which is a structural issue, in our view, and often manifests in credit quality surprises,” UBS said. Simply put, when compared to its peers, the bank has far fewer individual deposits to make up for any more loans that may turn sour in the days to come. The stock which is trading at a price close to its 52-week lows after the recent quarterly earnings showed that the bank’s net profit fell 62% to ₹3.6 billion. Moreover, the bank made a provision of ₹12.7 billion against its loan to the troubled infrastructure lender IL&amp;FS. A provision is the amount of money a bank sets aside to cover a loan which is unrecoverable. Not only did this amount come<a href="https://www.businessinsider.in/indusind-bank-bad-loan-impact-from-ilfs-crisis/articleshow/69557477.cms"> in too late</a>, but it also is not enough to cover its exposure to IL&amp;FS which turned insolvent last year. The bank had been changing goal posts of its extent of exposure almost every quarter since the crisis unfolded. “They should have told us (analysts) from day one about the provision, and not have guided lower numbers to us,” says Hemindra Hazari, an independent capital markets. He wrote a report on the bank titled ‘ Sell-Side Analysts’ Blind Faith in IndusInd Bank Need Not Blind Investors’. SEE ALSO <a href="https://www.businessinsider.in/indusind-bank-bad-loan-impact-from-ilfs-crisis/articleshow/69557477.cms">An Indian bank is still making the same mistake of hiding the worst and hoping for the best</a>

Investors lose over $600 million in a day in one stock as the management was more optimistic than cautious

<ul><li>The March quarter saw India’s top listed companies meeting analyst expectations, primarily driven by auto and BFSI sectors. </li><li>These two sectors are expected to power <keyword id="46431" type="General" weightage="20" keywordseo="India-Inc" source="Orion">India Inc</keyword>’s earnings again in FY24. </li><li>Moderating inflation, healthy macroeconomic indicators and robust balance sheets are expected to keep India Inc’s earnings robust. </li></ul>India’s top listed companies’ March-quarter earnings largely met analyst expectations, driven by strong growth in two critical sectors – auto and banking, financial services and insurance (BFSI). Analyst consensus is that these two sectors will continue to power India Inc’s earnings going forward. “Nifty's earnings growth stood at 16% year-on-year as against estimates of 14% YoY. The overall performance was driven by the BFSI and auto sectors that posted 43% and 115% YoY earnings growth,” said brokerage firm Motilal Oswal. India Inc’s performance remained healthy during the March quarter despite a challenging global macroeconomic environment and concerns of an economic slowdown in the developed markets. “Of the 21 sectors under our coverage, six sectors reported profits above our estimates, eight sectors reported in-line profit numbers and seven sectors reported profits below our estimates,” Motilal Oswal added. The Indian banking sector was a standout, <a href="https://www.businessinsider.in/finance/banks/news/icici-bank-vs-hdfc-bank-how-indias-top-two-private-lenders-have-performed-in-q4/articleshow/99733618.cms">delivering</a> a<a href="https://www.businessinsider.in/finance/banks/news/sbi-vs-bank-of-baroda-vs-canara-bank-performance-comparison-based-on-q4-2022-23-earning-reports/articleshow/100357639.cms"> second consecutive quarter</a> of stellar performance. In the <keyword id="46265" type="General" weightage="20" keywordseo="auto-sector" source="Orion">auto sector</keyword>, industry leaders<a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-q4-net-profit-zooms-43-to-2624-crore-beating-expectations-to-add-capacity-of-1-million-vehicles/articleshow/99790060.cms"> Maruti Suzuki</a> and Tata Motors beat analyst expectations –<a href="https://www.businessinsider.in/business/auto/news/tata-motors-in-top-gear-jlr-to-drive-growth-in-fy24/articleshow/100252339.cms"> Tata Motors bounced back</a> to profitability in FY23, on the back of robust performance of its British subsidiary, Jaguar Land Rover. “In-line revenue growth and strong earnings beat substantiate an earnings up-cycle trend in India. Broad market earnings underperformed, but remained strong,” said global brokerage Morgan Stanley. Auto and BFSI sectors are expected to lead growth once again, with others like telecom and consumption also amongst top favourites. <cmsannotation type="cmsannotation" annotationid="Outlook robust" comment="subhead" text="Outlook robust">Outlook robust</cmsannotation> Morgan Stanley reported a slight beat in terms of earnings and profitability in its coverage universe – while it had estimated revenue and profit growth of 13% and 19% respectively in Q4, the reported revenue and profit grew at 14% and 24%, respectively. Robust growth in revenue and profits has brought cheer back to the Indian markets as well – benchmark indices Nifty50 and the <keyword id="6484188" type="General" weightage="20" keywordseo="Sensex" source="Orion">Sensex</keyword> have entered positive territory after volatility earlier this year. While the Nifty50 is up 2%, the Sensex is up 2.4% so far in 2023. It’s not just India Inc that has delivered healthy growth – the Indian economy<a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms"> handsomely beat economist expectations</a>, expanding by 6.1% in the March quarter as against the expected 5% growth. For FY23, India’s gross domestic product (GDP) growth came in higher at 7.2%, beating the government’s own expectations of 7% growth. Foreign investors have also <a href="https://www.businessinsider.in/stock-market/news/foreign-institutional-investors-pump-27856-crore-in-indian-equities-in-may/articleshow/100693791.cms">flocked back to the Indian markets</a>, with foreign institutional investor (FII) flows surging to a 27-month high in May at ₹27,856 crore. Foreign portfolio investors (FPIs) have pumped ₹43,838 crore into Indian equities, the highest in the last 9 months. “With healthy macros, range bound oil prices, a robust fiscal balance sheet and moderating inflation, the outlook for the market looks optimistic,” Motilal Oswal said. <cmsannotation type="cmsannotation" annotationid="These sectors see downgrades" comment="subhead" text="These sectors see downgrades">These sectors see downgrades</cmsannotation> However, there are some pockets of weakness as well, resulting in downgrades. According to analysts, metals, energy and utilities are the sectors that saw the most downgrades. The IT sector, which has been struggling due to a slowdown in its core markets of the US and Europe, has seen the most downgrades from Morgan Stanley. Analysts at IIFL Securities echoed similar sentiments, stating that they are ‘negative’ on the IT sector. Analysts at Motilal Oswal reiterated their ‘neutral’ stance on the sector. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-enterprises-titan-eicher-motors-tata-motors-reliance-and-other-big-companies-performance-in-nifty-50/articleshow/100474408.cms">Big boys drive Nifty50’s revenue and profit growth in FY23</a> <a href="https://www.businessinsider.in/stock-market/news/nifty-sensex-now-at-reasonable-valuations-but-midcaps-small-caps-and-financials-still-have-some-juice-left/articleshow/100611412.cms">Nifty, Sensex now at 'reasonable valuations' but midcaps, small caps and financials still have some juice left</a> <a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms">India’s GDP forecast raised but El Nino, export contraction threats hover</a>

You Searched For "us downgrade india" and got 12 results

India's GDP growth forecast continues to see cuts

Katya Naidu

No end to downgrades in GDP estimates as economists remain divided on severity of slowdown

Katya Naidu

Foreign investors have pulled out nearly $7 billion in the last two months, and over $12 billion since April this year

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The competition between India and China is about more than raw power

Tom Porter

Stock market today: US stocks tumble as bond yields jump after hotter-than-expected inflation data

Phil Rosen

Rupee gains 8 paise to 81.60 against US dollar

PTI

Tata Motors downgraded again, thanks to slow India business and ‘elevated risks’ from Jaguar Land Rover

Sanchita Dash

Moody's rating downgrade not surprising: SBI report

PTI

Moody's downgrades India's rating first time in over 2 decades, says GDP to shrink by 4% in FY21

PTI

Here's why the US could still be considered in default even if it keeps paying its debt

Phil Rosen

Investors lose over $600 million in a day in one stock as the management was more optimistic than cautious

Katya Naidu

Auto and BFSI seen driving India Inc’s earnings growth this financial year

Rounak Jain

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