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India’s Chief Economic Advisor (CEA), <keyword id="20690607" type="General" weightage="20" keywordseo="V-Anantha-Nageswaran" source="keywords">V Anantha Nageswaran</keyword>, remains optimistic about the nation’s economic prospects despite a slower-than-expected <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> in the second quarter of FY2024-25. Speaking at the Bharat @100 Summit hosted by Assocham, he said that the fundamental health of the economy remains robust, according to a report by aNI. Nageswaran highlighted several indicators demonstrating the economy’s resilience. “If you run through the checklist for the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword>, the health is pretty robust,” he noted, pointing to controlled levels of external debt as a share of GDP, declining non-performing assets in the banking system, and stable inflation trends. Although certain food items have caused inflationary spikes, their impact is limited within the overall consumer price index basket, he explained. The CEA praised the shift in fiscal expenditure priorities over the past seven years, with greater focus on capital investments rather than revenue spending. This reallocation, he suggested, has bolstered long-term economic stability and growth potential. India’s GDP growth for the July-September quarter was 5.4%, significantly below the Reserve Bank of India’s forecast of 7%. While this has sparked concerns among economists, Nageswaran urged against overreacting. Erratic monsoons and excessive rainfall disrupted economic activity in Q2, he explained, while global uncertainties and supply chain pressures further weighed on growth. Despite these challenges, he maintained confidence in the broader growth narrative, citing improvements in key economic metrics. For instance, India’s gross capital formation has risen from 27.3% of GDP in the second decade of the 2000s to 30.8% today. Private consumption remains steady, and exports—spanning both services and manufacturing—continue to perform well even amid challenging global conditions. Nageswaran also underscored India’s growing competitiveness in international trade. He noted that the nation’s total <keyword id="24325087" type="General" weightage="20" keywordseo="exports-as-a-percentage-of-GDP" source="keywords">exports as a percentage of GDP</keyword> now surpass China’s, showcasing its resilience and adaptability in a shifting global trade environment. However, he cautioned against reading too much into quarterly fluctuations, highlighting the impact of geopolitical developments such as trade restrictions from the US on critical minerals and rare earths, as well as policy shifts in China. These external factors, he suggested, are likely to persist and may continue influencing short-term economic trends. (with ANI inputs)

Indian economy is resilient despite Q2 challenges, says CEA Nageswaran

<ul class="summary-list"><li>Expect a re-acceleration of inflation for the rest of 2024 into 2025, says Michael Landsberg.</li><li>High shipping rates and daily living expenses indicate that inflation could be worse than expected.</li></ul>A few months ago, it seemed like the war on <a target="_blank" href="https://www.businessinsider.com/higher-long-term-inflation-outlook-investing-strategy-attractive-bonds-stocks-2024-10">inflation</a> had been won.Wall Street strategists were expecting inflation to continue cooling down into 2025, clearing the way for a series of consistent rate cuts as the Federal Reserve insisted price increases were no longer a threat. In September, the Consumer Price Index (CPI) showed that prices rose 2.4% from last year — closing in on the Federal Reserve's target of 2%.Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, wasn't so sure. He saw signs in the market pointing to a re-acceleration of inflation in the last few months of 2024 and into 2025.Now, it seems like Landsberg may be right. After a Trump victory, concerns about inflation are creeping up again as proposed policies such as <a target="_blank" href="https://www.businessinsider.com/trump-tariffs-hit-company-stock-profits-hardest-china-investing-manufacturing-2024-11">tariffs</a> could push prices up. And as the October CPI report showed, inflation is back on the rise, with prices increasing 2.6% year-over-year. In an interview with Business Insider, Landsberg shared the economic indicators he's watching to monitor inflation and the best way to prepare your portfolio in case of another flare up.<h2 id="7dc40d47-f3ee-4de6-bd68-d838e6c9299f">'Higher for longer'</h2>Inflation could rise to 3% as early as January and hit a mid-3% level in 2025, making it difficult for the Federal Reserve to continue its rate-cutting cycle, in Landsburg's view. He's expecting the Fed to pause rate cuts in December.Landsberg believes the Bureau of Labor Statistics' metrics aren't providing the full inflation picture. He's keeping his eye out on other economic indicators that provide a more on-the-ground look at inflation levels.First, rising Chinese shipping rates are a telling sign of inflation. China is one of the US' biggest trading partners, so an increase in transportation costs between the two countries will likely trickle down and reflect in consumer prices.Geopolitical conflicts in the Red Sea are contributing to the price increases, as shipping companies are forced to detour and choose longer and more expensive routes, according to Landsberg.With <a target="_blank" href="https://www.businessinsider.com/inflation-fed-rate-cuts-red-sea-attacks-panama-canal-shipping-2024-1">12% of global trade</a> passing through the Suez Canal, the Red Sea region is a critical trade route for consumer basics such as oil, cars, raw materials, and electronic components. As a result, these blockades are putting pressure on global supply chains and shipping costs.<div type="image" title="Shanghai Containerized Freight Index" height="663" width="1185" msid="115308890" hostid="261" sizebytes="33696"></div>The Shanghai Containerized Freight Index, which tracks the current spot freight rates for containerized cargo departing from Shanghai, China, has remained elevated in 2024 after spiking earlier this year due to the continued blockade of the Red Sea by Houthi rebels."Shipping costs don't affect margins of companies as much as they're going to affect people's wallets, and that's not getting looked at," Landsberg said.Landsberg also points to the high prices of commodities and everyday necessities. Food prices and rents are still rising. In some East Coast metro areas, rents have risen over double digits since last year, according to <a target="_blank" class="" href="https://www.redfin.com/news/rental-tracker-october-2024/">Redfin</a>.Insurance prices are another strong indicator of inflation, whether it be for cars or <a target="_blank" href="https://www.businessinsider.com/states-most-at-risk-climate-change-rising-home-insurance-premiums-2024-10">homes</a>."Inflation in insurance, which everyone has to have all the time, is up double digits year-over-year," Landsberg said. "That affects people's wallets certainly more than just a printed CPI number."That's not to mention the potential of wage inflation. According to October's employment report, hourly wage growth was up 4% from this time last year. If Trump clamps down on immigration, then that number could go even higher as the supply of workers falls, pushing up the cost of labor.<h2 id="102f3015-2817-4d7e-8b5c-6ea2e030d247">Rebalance your portfolio</h2>Diversification is key in an inflationary environment by spreading out risk between sectors and asset classes, but you might be less diversified that you think, according to Landsberg.One mistake that Landsberg sees investors making is doubling down too much on a specific investment theme. Investors bullish on AI may have devised creative ways to play the AI trade outside of the technology sector, such as buying data center real estate investment trusts and utility stocks. This can give them a false sense of security in their portfolio, as it seems like they're exposed to multiple different sectors.However, if all of your investments across sectors are based on the AI theme, you won't experience much derisking.Landsberg points to the market selloff in August this year, where utilities and real estate indices fared better than technology, but individual real estate and utilities stocks with significant exposure to data centers didn't perform so well."I tell people now that we need to be diversified on themes, not just on sectors," Landsberg said. Some other secular growth themes that Landsberg believes will drive stocks include an aging population, cybersecurity, and alternative energy.In addition to making sure you're sufficiently diversified, there are some other steps that you can take to protect your portfolio from inflation. Landsberg identified a few inflation-benefitting trades such as energy, financials, and <a target="_blank" href="https://www.businessinsider.com/how-to-invest-in-gold-price-record-highs-safe-haven-2024-10">gold</a>.Some funds that provide exposure to these sectors include the Energy Select Sector SPDR Fund (<a target="_blank" href="https://markets.businessinsider.com/etfs/the-energy-select-sector-spdr-fund-us81369y5069?miRedirects=1">XLE</a>), the iShares US Financials ETF (<a target="_blank" href="https://markets.businessinsider.com/etfs/ishares-us-financials-etf-us4642877884?miRedirects=1">IYF</a>), and the Goldman Sachs Physical Gold ETF (<a target="_blank" href="https://markets.businessinsider.com/etfs/goldman-sachs-physical-gold-etf-us38150k1034?miRedirects=1">AAAU</a>)As the end of the year draws near, Landsberg recommends taking a look at your portfolio and rebalancing some positions. If you're overexposed to technology and AI, now is a good time to put money in more inflation-resistant areas.Ultimately, make sure you're investing in high-quality companies with a robust financial profile, he said."You need to have a portion of your portfolio that will do well if inflation starts to move back higher," Landsberg said. "You want companies with pricing power, companies with earnings growth."

Here's how to rebalance your portfolio as these economic indicators flash 'higher for longer' inflation and rates

<ul class="summary-list"><li>Tracy Young said she couldn't be a CEO and a mother without reproductive rights.</li><li>Deciding if and when to have children impacts women's ability to be in the workforce.</li></ul>It might be common sense to many women, but Tracy Young decided to say it out loud."As both a mother and CEO of two companies, I've experienced firsthand how crucial reproductive rights have been to my journey," she wrote in a post on LinkedIn last month.Young, who studied construction engineering, has cofounded and served as the CEO of two startups: Plan Grid, a construction software company, and TigerEye, an AI analyst for go-to-market teams."It's surprising to me that in 2024, these are the conversations we are having, and part of the reason why I wrote that essay is because there's so much debate," Young told Business Insider. "I can guarantee you that I would not have been able to see through this journey of being a founder and CEO had it not been for the reproductive rights I was given."Young's story highlights what's at risk for women who don't have access to reproductive care, and how the issue can impact not only women in the workplace but the economy at large.Things like birth control to abortion access have been "game changers" for women's ability to participate in the workforce, said Alina Salganicoff, the senior vice president and director of the Women's Health Policy Program at KFF, a health policy research organization."Being able to control whether and when you have a child makes a huge difference in your life, your personal life, as well as the professional options and the education that you can pursue," Salganicoff told BI.The issue is now front and center two weeks from a presidential election. Several states will have <a target="_blank" class="" href="https://www.businessinsider.com/states-putting-abortion-access-on-ballot-2024-8">abortion access on the ballot</a>.It's largely been a winning <a target="_blank" class="" href="https://www.businessinsider.com/democrats-arent-shying-away-from-abortion-talk-this-election-2024-6">issue for Democrats</a> since the Supreme Court <a target="_blank" class="" href="https://www.businessinsider.com/supreme-court-abortion-decision-final-ruling-scotus-roe-v-wade-2022-6">overturned Roe v. Wade</a> in 2022, ending the federal legalization of abortion. Even states that typically lean conservative have seen <a target="_blank" class="" href="https://www.businessinsider.com/abortion-rights-ohio-virginia-kentucky-elections-gop-roe-v-wade-2023-11">votes in favor of legalizing abortion</a>.<h2 id="4f684b4f-9934-42e2-b8a3-86717fb3c43c">How reproductive care helped Young's career</h2>Young knew that she wanted to be a parent, but the timing wasn't right when she was in college, working on a construction site, or building a company, she said."Birth control helped me time pregnancy for when I was ready," Young said. "When I was building a startup for the first time and leading it as CEO for the first time, doing the biggest job I've ever done before, it was just not the right time for me."Young and her husband had their first child in 2018, after Young said she had "matured as a CEO and as a leader.""I just felt more competent," she said. "At that point, it felt right."Access to reproductive healthcare made the difference again for Young when she experienced a miscarriage at work during a subsequent pregnancy. Young said her doctors in California gave her misoprostol, one of two common drugs doctors use to <a target="_blank" class="" href="https://www.businessinsider.com/midwife-language-procedures-miscarriage-or-termination-can-be-the-same-2022-6">manage abortions or miscarriages</a>. She also had a surgical procedure."There was no hesitation for the doctors to give me the treatment that they knew I needed," Young said. "Because of the Supreme Court's decision to overturn Roe v. Wade, many states now have heavy restrictions on prescribing the drugs that were given to me as a treatment."More than half of US states now have restrictions on when during the gestational period an abortion can legally be performed, and 13 states have total abortion bans that impede access to care with few exceptions, according to the Guttmacher Institute, a reproductive health research and policy nonprofit organization.Abortion denial has downstream effects on women's economic potential, Salganicoff said, impacting everything from their education level to their ability to advance in their careers.For example, the ongoing "Turnaway Study" from the University of California, San Francisco, found that denying abortion care to women increases their likelihood of experiencing poverty, joblessness, and other economic hardships. Similarly, a recently published study from the Georgetown Center on Poverty and Inequality found that restrictions on abortion access "pose significant risks to the well-being and economic security of women," especially low-income women.The result harms women and the world at large, Young said."There's a lot of problems in the world. We probably want half of the population's brains helping solve these really hard problems," Young said. "I do."

How access to reproductive care shaped a founder's career, highlighting its importance as an economic driver

India’s political landscape is increasingly being defined by the troubling nexus between crime and politics. A study has highlighted a startling correlation: the election of politicians with criminal records is directly linked to a rise in crime across the country, particularly in states with weaker institutional frameworks. As India's political system continues to grapple with this issue, the societal consequences are becoming clear. <h2>A history of <keyword id="23341122" type="General" weightage="100" keywordseo="criminal-politicians" source="keywords">criminal politicians</keyword></h2><keyword id="21026899" type="General" weightage="20" keywordseo="Pappu-Yadav" source="keywords">Pappu Yadav</keyword>, a veteran politician from Bihar, serves as a prime example of this disturbing trend. Having represented his constituency for nearly 25 years, Yadav has faced 41 criminal cases, including serious accusations of murder and kidnapping. Despite his conviction in 2008, Yadav was acquitted in 2013, and he continues to hold political influence. His case is not unique; the political scene in states like Bihar, Uttar Pradesh, and Madhya Pradesh is littered with politicians facing multiple criminal charges. Anant Singh, another prominent figure from Bihar, holds a political career shadowed by 38 criminal cases, including murder, kidnapping, and attempts to murder. These individuals represent a broader pattern where politicians accused of serious crimes continue to serve in public office despite their criminal backgrounds. "They are getting elected, and over time the number has only been going up," remarks lead author Nishith Prakash. "In some states, it could be as high as almost 40% of people who are representing the state have some kind of a criminal accusation." <h2>Crime begets crime</h2>The research delves into the ramifications of electing criminally accused politicians. The study found that states with a higher number of such politicians also experienced increased <keyword id="22044507" type="General" weightage="20" keywordseo="crime-rates" source="keywords">crime rates</keyword>. For example, states like Bihar, Madhya Pradesh, Rajasthan, Odisha, and Uttar Pradesh, known for their historically weak institutions, have seen crime rise by 4.3% annually with the election of criminal politicians. The number increases to 5.8% when the politicians are accused of serious crimes like murder and kidnapping. <div type="Article" hostid="261" msid="113692670" title="What will it take for Kangana Ranaut’s &amp;#39;Emergency&amp;#39; to finally hit theatres?" mstype="2" mssubtype="0"></div>Prakash notes that weak rule of law and institutional failure create fertile ground for such politicians to not only rise to power but also exacerbate the deteriorating law-and-order situation. When politicians themselves are involved in criminal activities, they often manipulate legal and administrative systems, further weakening law enforcement and emboldening criminal networks. The reign of <keyword id="20122630" type="General" weightage="20" keywordseo="lalu-prasad-yadav" source="keywords">Lalu Prasad Yadav</keyword>, president of the Rashtriya Janata Dal political party in Bihar, illustrates the adverse impact criminal politicians can have. Under his leadership, Bihar’s political environment devolved into what is now infamously known as "Jungle Raj," a period marked by rampant kidnappings for ransom, particularly targeting affluent individuals like doctors and schoolchildren. The researchers note that during this time, the kidnapping industry flourished as criminals enjoyed either direct or indirect support from the state. <h2><keyword id="22404298" type="General" weightage="20" keywordseo="impact-on-women" source="keywords">Impact on women</keyword> and <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword></h2>Beyond the immediate rise in general crime rates, the study revealed alarming statistics regarding crimes against women. Electing criminally accused politicians was found to increase crimes against women by 12.6%. In states where such politicians held office, female labour force participation dropped by 10-11%, as women felt unsafe and chose not to engage in work outside their homes. The research also highlighted the economic toll criminal politicians take on their constituencies. Areas represented by politicians accused of serious crimes saw economic growth lag between 2.3% and 6.5% per year compared to other regions. These leaders often misappropriate public funds, divert resources for personal gain, and enable criminal enterprises, all of which stifle local development. <h2>Legal measures taken</h2>India has made strides in identifying and tracking criminally accused politicians. A landmark 2003 ruling by the <keyword id="19895345" type="General" weightage="20" keywordseo="Supreme-Court" source="keywords" meta.keywordsubtype="org" meta.entityname="Supreme Court" meta.hostid="261" meta.entityid="Supreme Court">Supreme Court</keyword> mandated that candidates for political office must disclose their criminal records, making it easier for voters and institutions to scrutinise their backgrounds. However, the law only disqualifies convicted individuals from running for office, allowing accused politicians to continue their political careers while facing serious charges. <div type="Article" hostid="261" msid="113446721" title="It&amp;#39;s not just the rhetoric — apathy and jokes could be fueling a spiral of retaliatory political violence, expert warns" mstype="2" mssubtype="0"></div>The research conducted by Prakash and his team has caught the attention of Indian courts and the Election Commission. While reform is slow, there is growing recognition that the quality of political leadership has a profound impact on societal outcomes, from crime rates to economic performance. "The quality of politicians matters," Prakash notes. "Who you elect has implications on outcomes that we care about. It could be economic growth, it could be crime against women, it could be labour force participation. These are very important outcomes for society and the economy." The findings of this research have been published in Journal of Law Economics and Organization and can be accessed <a href="https://docs.iza.org/dp15259.pdf">here</a>.

Not only does electing “criminal” politicians often lead to an increase in crime in India, it can also be terrible for the economy: study

<keyword id="20207838" type="General" weightage="20" keywordseo="dsp-mutual-fund" source="keywords">DSP Mutual Fund</keyword>'s September 2024 Netra report credits <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s strong economic recovery to increased fiscal expenditure. The report, which tracks current economic trends and market insights through various charts, emphasizes the need for the private corporate sector and households to play a larger role in sustaining the ongoing growth momentum. Netra also pointed out an unsettling calm in the markets, with the Nifty 50 TRI index maintaining an impressive 53-month streak without a 5% decline and 13 years without a drop greater than 10%. Sahil Kapoor, Head of Products and Market Strategist, DSP Mutual Fund, said, "The calm in the markets, marked by an unnerving lack of volatility, is a double-edged sword. While it provides a sense of stability, it also masks underlying risks that could surface unexpectedly, catching investors off guard. To ensure a sustainable recovery, there is a need for the private sector and households to take the lead, transforming fiscal stimulus into lasting economic growth." However, the report notes a shift in market dynamics, with the momentum factor, which has outperformed since the COVID-19 bottom, beginning to lose its dominance. At the same time, the quality factor, which had underperformed over the last four years, is now seeing a resurgence, potentially indicating a change in market leadership that could favour quality-orientated funds, both active and passive. The report highlights the critical role government spending has played in the recovery, with a focus on capital investments crucial for future growth. However, contributions from the private corporate sector and households have lagged. It also draws attention to a slowdown in India's per capita consumption, approaching lows seen in previous cycles. Given that consumption accounts for around 60% of GDP, it is vital that this sector grows at a rate exceeding GDP growth to stimulate private capital expenditure. India's <keyword id="487578" type="General" weightage="20" keywordseo="tax-collections" source="Orion">tax collections</keyword> have demonstrated robust growth, with gross tax revenue showing a five-year compound annual growth rate (CAGR) of 14 %. This growth, largely driven by <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, indicates a rising dependency on capital gains and stock market performance, introducing new vulnerabilities to the economy. The banking and financial services sector (<keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword>) has emerged as a key driver of market earnings, recording a 12 % increase in profit after tax (PAT) growth, significantly outpacing the 4.6 % growth observed in non-BFSI Nifty 50 companies. This disparity underscores the sector's importance in India's economic story and highlights promising investment opportunities.

India's strong economic recovery is led by fiscal expenditure: DSP MF

<ul class="summary-list"><li>Analysts are increasingly recommending defensive stocks to blunt the impact of an economic slowdown.</li><li>Among defensive sectors, consumer staples have risen sharply recently. </li></ul>Amid fears of a recession and increased market volatility, analysts have been pointing to defensive stocks as a safe bet to hedge macro risk.Among defensive sectors — which include things like real estate and financials — investors recently have been pouring into consumer staples in particular.The S&amp;P 500's consumer staples sector has risen roughly 4.1% in the last month, handily outpacing the S&amp;P 500, which is up just over 1% in that time.Retailers like Walmart and Target have skyrocketed 9.2% and 5.7% respectively in the last month, while consumer goods producers like Clorox and Coca-Cola are up 11.2% and 4.5%."The US consumer is reacting to the softer labor market, exhausted pandemic savings, and high interest rates. Signs of this reaction are visible across many angles, including the degree of outperformance in staples versus discretionary stocks," Bank of America strategists said in a note earlier this month.Defensive stocks historically do well in times of economic uncertainty, which has led to <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/safe-defensive-stocks-ai-investing-rally-nvidia-semiconductors-selloff-outlook-2024-9">a growing chorus of analysts </a>recommending investors take positions in more "boring" companies, and resist the allure of high-flying bets on things like artificial intelligence."Lately, the market has skewed much more defensively as it has worried more about growth and less about high inflation or rates," Morgan Stanley's chief US equity strategist Mike Wilson said in a Monday note."Since the spring, the relative performance of defensives over cyclicals has been the strongest since the last recession ended," he added.Last week, Wilson said investors should <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ai-stocks-overcooked-nvidia-seminconductors-morgan-stanley-mike-wilson-2024-9?_gl=1*1uze75i*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyNjU3MzcyNC4xNDcuMS4xNzI2NTc4MTEzLjUwLjAuMA..">reallocate AI investments</a> toward quality defensive stocks, including staples.That redirection could broaden a market rally that's been largely driven by tech stocks this year. The S&amp;P Global Semiconductor Index is down 6.26% for the month, with the tech sector seeing outflows of $2.97 billion in the last two weeks, according to LSEG Lipper data cite by The Financial Times. Consumer staples, meanwhile, have seen $1.43 billion of inflows in the same time period.This week, Bank of America equity strategy chief Savita Subramanian <a target="_blank" href="https://www.businessinsider.com/safe-dividends-bank-america-strategy-chief-savita-subramanian-federal-reserve-2024-9">similarly advocated for defensive stocks</a>."I know this is the most boring call of all time, but sometimes boring is good," Subramanian said in a Bloomberg interview on Monday.With the Federal Reserve likely to finally cut rates at its meeting this week, defensive stocks could be poised for further growth."Defensives tend to outperform cyclicals fairly persistently both before and after the cut," Wilson said.

Investors are pouring into this defensive corner of the stock market amid fears of an economic slowdown

<ul class="summary-list"><li>Citi says the election appears to be having a smaller impact on stocks compared to previous years.</li><li>Analysts point to a relatively low VIX reading, a strong market rally, and rotation into pricier stocks.</li></ul>The election tends to have a strong impact on the path of the market in the run-up to the vote, but traders appear focused on other things this year, Citi analysts said. The analysts said several market indicators that normally flash ahead of US elections are notably quiet this year, signaling potentially fewer worries about the election's impact on the market than in past years.Instead of the election, traders are dialing in on the US economy and earnings season, the analysts say."For the lead-up to the US election, equity market behavior has not been in line with previous elections," the analysts said in a Monday note. "Overall, this suggests that other risks, such as US macro, reporting season etc., are having a bigger influence than any perceived election risks."The analysts pointed to the market's continued rally into the months leading up to the election. They note that typically, investors rotate out of equities before the election, making the prior month's performance usually negative.The S&amp;P 500 is down 0.3% in the last month, but in the last six months, it's up 10.7% as it continues a strong bull run. The analysts said that strong performance in the weeks leading up to Election Day is likely due to the strength of US economic conditions, rather than markets taking positions in a "Trump Trade" or a "Harris Trade.""US equities have been very strong coming into this election cycle compared to the past," the analysts said. "The current anomaly has less to do with the market pricing a certain election outcome but more to do with an expectation of continued interest rate cutting combined with a likely shallower US economic slowdown."The Federal Reserve kicked off its easing cycle in September and is expected to continue with a series of 25 basis point interest rate cuts at upcoming meetings. Meanwhile, economists are increasingly expecting a "soft landing" for the US economy, as it dodges a steep recession while inflation continues to edge lower.A relatively low reading on the volatility index is another sign that markets may not be putting too much stock in the election outcome. A low VIX number is rare in election years, the analysts said. "The heightened uncertainty should translate into higher expectation of volatility. Despite this observation, with equity markets making new highs and the VIX being low, it suggests that investors are not too concerned with the election outcome," they wrote.Like past years, though, the analysts said there is a high chance that the market will rally after the election. They said the current market positioning, boosted by mostly solid earnings in the latest reporting season, sets equities up well to rally after the November 5 vote and potentially climb to new highs in the new year.

The stock market's performance shows the election is taking a back seat to the economy, Citi says

<ul><li>The Indian economy is expected to grow at over 7% rate in upcoming years</li><li>Fiscal deficit down to 6.4% of <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword> in FY24</li><li>Current Account Deficit (CAD) down to 0.7% of GDP </li></ul>With the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024 to be presented tomorrow, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> is presenting the <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> in the parliament today. Think of the <keyword id="6354872" type="General" weightage="20" keywordseo="economic-survey" source="Orion">Economic Survey</keyword> as a report card of the country's economic performance over the past year, along with inputs and outlook for the coming fiscal year. Here are some crucial highlights from the Economic Survey 2023-24: <h2>Macro-economic indicators</h2>Per the World Economic Outlook in April, the <keyword id="19948494" type="General" weightage="20" keywordseo="global-economic-growth" source="keywords">global economic growth</keyword> was pegged at 3.2% in 2023. In contrast, <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s real GDP grew by 8.2% in FY24, staying above the 8% mark for 3 out of 4 quarters in FY24. Gross Fixed Capital Formation, or investments in long-term, value-generating fixed assets increased by 9% real terms in 2023-24. The government trimmed down fiscal deficit trimmed down from 6.4% of GDP in FY23 to 5.6% of GDP in FY24.The current account deficit, which indicates that the country is a net importer rather than being an exporter, came down to 0.7% of GDP in FY24, as opposed to 2% of GDP in FY23. While retail inflation averaged at 6.7% in FY23, it dropped down to 5.4% in FY24 During FY24, primary markets saw capital formation, or facilitated raising funds worth Rs 10.9 lakh crore, which makes up for around 29% of the gross fixed capital formation. India's market capitalization to GDP ratio is the fifth largest in the world. <h2>Inflationary Trends </h2>Core inflation eased down to 9-year lows, while core goods inflation came down to a 4-year low. However, food inflation continued to stay high, inching up to 7.5% in FY24, as opposed to 6.6% in FY23. This was largely because of adverse weather conditions, which caused a spike in onion and tomato prices and impacted kharif crop production. Going ahead, RBI's short-term outlook remains positive. Assuming a normal monsoon and no extraordinary policy or geopolitical shocks, the inflation is estimated to drop to 4.5% in FY25, and further down to 4.1% in FY26. These are in line with IMF's inflation forecasts, which stand at 4.6% for 2024 and 4.2% for 2025. <h2>Export-Import trends</h2>India's service exports jumped by 4.9% to $341.1 billion in FY24, driven mainly by IT and software services. Apart from being the top remittance recipient globally, with remittances worth $120 billion in 2023, the country also witnessed investment inflows from foreign investors. As of March 2024, India's forex reserves were sufficient to cover over 10 months of projected imports in FY25, and about 98% of all its external debt. The country's external debt to GDP ratio has been largely consistent over the years, standing at 18.7% of the GDP as of March 2024. <h2>Key growth areas to look out for in FY25 </h2>Essential to adopt bottom-up reform approach, with special short to medium term emphasis on structural changes, job and skill creation, addressing challenges faced by MSMEs, managing India's transition towards a green, clean economy, deepening the country's nascent bond market and laying greater stress on tackling quality of health, especially amongst young Indians. Deliberate focus needed on boosting private investment, expanding India's MSMEs, tapping into the potential of India's agriculture sector, manage India's green transition, urgently bridge the employment-education gap and build capacity of states to sustain and complement India's growth. In the medium term, the country's economy is expected to grow at a rate of over 7%.

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