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<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword> [<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>], March 11 (ANI): Global rating agency Moody's expects India's economic growth in 2024-25 growth above that of other emerging market G20 peers, given its domestic demand managed to sustain momentum. India's real GDP growth accelerated to 8.4 per cent year over year in the October-December quarter of 2023, up from upwardly revised prints of 8.1 per cent in July-September and 8.2 per cent in April-June. The global rating agency Moody's attributed India's firm growth primarily to solid capital expenditure, defying private consumption which remained "sluggish" amid still-weak rural demand. On the supply side, an 11.6 per cent surge in manufacturing output and strong service sector activity more than offset a decline in agricultural output in India, it said. Even so, it said high-frequency indicators, including expanding <keyword id="20905252" type="General" weightage="20" keywordseo="purchasing-managers" source="keywords">Purchasing Managers</keyword>' Index (PMI), rising auto sales, consumer optimism and double-digit credit growth, suggest that the economy's strong October-December momentum carried into January-March this year. "Some of the large emerging market (EMs) countries stood out in 2023 for their resilient economies amid high-interest rates, exchange rate volatility, subdued capital flows and muted external demand. This year, we expect growth to slow across several major EMs as the economies transition to a post-pandemic steady growth path," Moody's said in its Macro Monday report, chaptered 'G-20 emerging markets are poised for growth stabilization'. In its recently published <keyword id="20905253" type="General" weightage="20" keywordseo="global-macro-outlook" source="keywords">Global Macro Outlook</keyword>, it forecasted G20 emerging market growth to stabilize around 4.0 per cent in 2024 and 2025, down from 4.7 per cent in 2023 as global monetary policy gradually normalises. On an annual basis, domestic demand was the primary engine of growth in several G20 emerging markets. "We believe growth cycles in India and Indonesia are at their peak, Brazil and Mexico are likely past their peak, and <keyword id="19899437" type="General" weightage="20" keywordseo="south-africa" source="keywords">South Africa</keyword>'s growth has likely troughed. Nevertheless, we expect relatively stable growth at close to potential in 2024 and 2025 for most G-20 EMs." On the policy side, the rating agency expects continuity after the general election in April-May and continued focus on infrastructure development. It forecasts India's real GDP to grow about 6.8 per cent in 2024 and 6.4 per cent in 2025, from 7.7 per cent in 2023. India's GDP grew at a massive 8.4 per cent during the October-December quarter of the current financial year 2023-24 and the country continued to remain the fastest-growing major economy. The Indian economy grew 7.8 per cent and 7.6 per cent during the preceding two quarters - April-June and July-September. The strength of domestic demand has driven the economy to a 7 per cent plus growth rate in the last three years. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively. In the next three years, India is expected to become the third-largest economy in the world, with a GDP of USD 5 trillion. India can aspire to become a USD 7 trillion economy in the next six to seven years (by 2030), India's finance ministry recently asserted. (ANI)

Domestic demand to keep India's growth above other G20 emerging markets: Moody's

<ul class="summary-list"><li>Despite a flat start to September, the S&amp;P 500 index is still boasting impressive year-to-date gains.</li><li>The benchmark stock-market gauge is up by over 16% so far in 2023, but one expert sees the rally losing steam.</li></ul>A surge in artificial intelligence-related tech shares has buoyed the stock market this year, in spite of the Federal Reserve's most aggressive monetary-tightening campaign since the 1980s. But one expert believes the rally is close to petering out, as rising bond yields erode the appeal of equities.Two-year Treasuries now pay a yield of almost 5%, near the highest levels since 2006 - such high returns on government bonds, which are considered the safest investments, tend to dent the attractiveness of riskier alternatives such as equities. Bonds maturing in 10 and 30 years pay 4.26% and 4.36%, respectively."It all suggests that the secular bull market for equities is in its twilight," Jurrien Timmer, director of global macro at Fidelity Investments, wrote in a <a href="https://affiliate.insider.com?h=39784790e4ec237a926f3e36a1606fec16ec9b53e72f66e54c1dd4b4205e36b4&amp;postID=6501c9b4261711ba2f686db5&amp;postSlug=stock-market-bull-run-in-twilight-fidelity-global-macro-head-2023-9&amp;site=bi&amp;u=https%3A%2F%2Fwww.linkedin.com%2Ffeed%2Fupdate%2Furn%3Ali%3Aactivity%3A7107451540910526464%2F" target="_blank" rel="noopener">LinkedIn post</a> Tuesday. "It seems safe to assume that we will go from double digits to single digits in the years ahead, with valuations bearing the brunt of the reset."Timmer cited higher bond rates as the main threat to stock prices. Two-year Treasury yields have surged by about 480 basis points in the past two years, as the Federal Reserve jacked up interest rates to fight inflation. Ten-year debt rates climbed about 400 basis points in the same period."If long yields keep climbing, it will leave a mark on valuations, per the discounted cash flow model (DCF), regardless of earnings. The secular outlook is already challenged by the valuation backdrop."Timmer isn't the only one who is adopting a cautious stance on equities.Strategists at JPMorgan said in a recent note that they were "staying defensive" on stocks, given "rich valuations and excessive optimism" in the market."US earnings are contracting, and consensus expectations for next year appear too optimistic given an aging business cycle with very restrictive monetary policy, rising cost of capital, lapping of very easy fiscal policy, eroding consumer savings and household liquidity, and elevated risk of a recession," they wrote.

The stock market bull run is in its 'twilight', Fidelity's global macro head 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%.

Economic Survey 2024: GDP grew by 8.2%, to sustain 7%+ growth momentum, fiscal deficit down to 6.4% of GDP

<ul class="summary-list"><li>Investors are fretting about Japan's interest-rate hike and US economic outlook.</li><li>Japan's rate hike sent Asian markets sharply lower on Monday. US stock futures are also down.</li></ul>Global markets opened on Monday on a sour note, with Japan's interest-rate hike last week hurting assets ranging from stocks to Bitcoin.Japan's benchmark <a target="_blank" class="" href="https://markets.businessinsider.com/index/nikkei_225">Nikkei 225</a> index fell as much as 8% by 1:45 p.m local time. Meanwhile, South Korea's <a target="_blank" class="" href="https://markets.businessinsider.com/index/kospi">Kospi</a> was 7% lower.Australia's <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_asx_200">ASX 200</a> was down 3.3%.Hong Kong's <a target="_blank" class="" href="https://markets.businessinsider.com/index/hang_seng">Hang Seng Index</a> was 0.9% lower while and China's <a target="_blank" class="" href="https://markets.businessinsider.com/index/csi-300">CSI 300</a> was little changed — but the Chinese stock markets have been under pressure this year due to the country's economic troubles.Investors are also on edge before the US markets open later in the global day. <a target="_blank" class="" href="https://markets.businessinsider.com/futures/s&amp;p-500-futures">S&amp;P 500 futures</a> were down 1.7% at 11:57 p.m. ET on Sunday, while <a target="_blank" class="" href="https://markets.businessinsider.com/futures/dow-futures">Dow Jones Industrial Average futures</a> were 0.8% lower. Nasdaq 100 futures were down 3.4%.<a target="_blank" class="" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> fell 13% over the past 24 hours.The negativity in US stocks ahead of the week's opening came after a recent <a target="_blank" class="" href="https://www.businessinsider.com/big-tech-investors-wary-high-ai-spending-markets-selloff-nasdaq-2024-7">selloff in tech stocks</a> as euphoria over artificial intelligence fizzled, with investors questioning when they would be seeing returns.A weak July jobs report from the US added to investor gloom, sparking a <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-selloff-today-jobs-report-recession-unemployment-tech-earnings-2024-8?utm_medium=ingest&amp;utm_source=markets">selloff in US stocks</a> on Friday, just days after the <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-likely-september-federal-reserve-holds-steady-july-2024-7">Federal Reserve</a> kept interest rates steady again.But it's not just the US economy and the Fed that is weighing on the markets. It's also about Japan's interest-rate hike last Wednesday.<h2 id="510f7699-0441-41e8-a3ed-cfa1d6b52dd8">Global carry trade unwinding</h2>The Bank of Japan raised its interest rate from between 0% and 0.1% to 0.25% on Wednesday — the highest level in 15 years.Even though it appears tiny, it matters because the Japanese yen has been the focus of carry trade, where traders profit from a divergence in interest rates across the world. Since the turnover in global foreign exchange markets is massive — it reached a <a target="_blank" class="" href="https://www.reuters.com/markets/us/global-fx-trading-hits-record-75-trln-day-bis-survey-2022-10-27/">record $7.5 trillion per day</a> in April 2022, according to a triennial survey — the fallout can be huge.Japan kept interest rates ultra-low for decades following the implosion of an asset bubble in the 1990s that contributed to persistent deflation. It continued holding rates low after the pandemic, in contrast to other major central banks that started hiking them.This created a divergence in monetary policy that impacted the Japanese yen, which sank to a near four-decade-low against the strong US dollar last month.This divergence helped carry trade, which, as <a target="_blank" class="" href="https://think.ing.com/articles/jpy-peeling-back-the-carry-trade-onion/">ING analysts</a> explained on Monday, has been a dominant successful investment strategy this year.It involves "borrowing cheaply in yen — on the expectation that the yen will continue to fall — and investing in some high-yielding currency or asset preferably backed by a strong macro argument," the ING analysts added.However, this strategy is now hit with a hitch, as the BOJ's rate hike last week sent the yen up — it's 7.5% higher over the last five trading days and is 1.6% lower against the dollar so far this year.The hike has also fanned further risk-off sentiment in global stock markets."The unwinding of yen shorts is undoubtedly contributing to the global risk-off environment," wrote ING analysts in a separate July 25 note.There are still be choppy waters ahead, particularly for risk assets, warned Vishnu Varathan, Mizuho Bank's chief economist of Asia excluding Japan on Friday."The dark clouds of adverse feedback loop between 'carry' liquidation and 'risk off' contagion cannot be ignored," he added.

Global markets are starting the week off on a sour note, and Japan is partly to blame

<ul class="summary-list"><li>Stock market "carnage" is set to continue as the Fed hikes and Chinese and global growth slows, TS Lombard said.</li><li>The consultancy said asset prices in general are likely to keep suffering, meaning hedging opportunities are "thin on the ground."</li></ul>The "carnage" in stock <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> will continue as the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> raises interest rates and Chinese and global growth slows, consultancy TS Lombard has warned.Freya Beamish, head of macro research at TS Lombard, added asset prices in general were likely to keep falling, meaning hedging opportunities are "thin on the ground."Stocks have tumbled dramatically in 2022 as the Fed has <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">hiked rates</a> to try to control inflation, and Russia's invasion of Ukraine has added to global economic concerns.The <a href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> has dropped more than 15% this year as of Wednesday, while the tech-heavy <a href="https://markets.businessinsider.com/index/nasdaq_100">Nasdaq 100</a> has plunged 24%."Market carnage is set to continue, as three cycles are ending at the same time," Beamish said in a note to clients Tuesday. Those cycles are coronavirus, which boosted certain companies; China's post-2008 credit boom; and the easy-money era of central bank policy.Beamish said the Fed is set to continue to raise interest rates sharply. She said a slowdown in the world economy is unlikely to meaningfully lower <a href="https://www.businessinsider.com/inflation-cpi-april-gas-food-energy-price-growth-russia-ukraine-2022-5">strong US inflation</a>, given that much of it is driven by strong domestic demand.Further hikes are likely to extend the pain for US markets, which have been locked in a post-financial crisis "asset cycle" that has boosted prices sharply."It is becoming clear that a hard landing from the equity market perspective is almost a requirement for controlling inflation," Beamish said.The TS Lombard economist said the Fed and slowing global growth are moving in a "pincer" movement."What is inside this pincer? Unfortunately, until something breaks, it is asset prices in general, leaving hedging opportunities thin on the ground."Beamish warned that the global slowdown should not lull the Fed into holding back from increasing interest rates more sharply. If it does, inflation could get out of control again and the central bank could be forced to hike rates even harder later on.Read more: <a href="https://www.businessinsider.com/brooks-running-jim-weber-warren-buffett-berkshire-hathaway-inflation-pandemic-2022-5" target="_blank" rel="noopener noreferrer">Brooks Running CEO Jim Weber leads one of Warren Buffett's best-known businesses. He provides a glimpse inside Berkshire Hathaway, and explains how he's navigated the pandemic and inflation</a>.

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Domestic demand to keep India's growth above other G20 emerging markets: Moody's

ANI

The stock market bull run is in its 'twilight', Fidelity's global macro head says

Joseph Wilkins

Economic Survey 2024: GDP grew by 8.2%, to sustain 7%+ growth momentum, fiscal deficit down to 6.4% of GDP

Ira Alok Puranik

Global markets are starting the week off on a sour note, and Japan is partly to blame

Huileng Tan

Stock market 'carnage' will continue as the Fed hikes while China slows — and there's nowhere to hide, TS Lombard says

Harry Robertson

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