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CNBC
15 hours ago
- Business
- CNBC
CNBC's Inside India newsletter: Peaked, paused, and poised? India's market reboot at half-time
Six months ago, the 2025 outlook for Indian equities looked far from rosy. India's stock market was entering the year from a correction, and my conversations with market watchers were bleak, with many predicting a slowdown in earnings and lofty valuation multiples. As we stand at the halfway mark of the year, it is safe to say that Indian equities have had a tumultuous six months marked by a bull run following U.S. President Donald Trump's wide-ranging tariff hikes, a sharp sell-off, and signs of a recovery. Still, the MSCI India Index — which captures the performance of 157 large- and mid-cap stocks — has risen just 5.68% so far, nearly seven percentage points less than the MSCI Asia Pacific Index. Meanwhile, the 50-stock Nifty 50 benchmark has added 8% so far this year, underperforming the 19.6% gains in Hong Kong's Hang Seng Index and the 29.4% surge in South Korea's Kospi index. My conversations on what was not too long ago one of the world's top-performing stock markets, have transitioned from euphoria to cautious optimism in the short term. "Indian markets peaked last September and then corrected all the way till February before bouncing back to peak levels now. However, quarter-on-quarter earnings have continued to slow, so we're back to square one," Pramod Gubbi, co-founder of Marcellus Investment Managers, told me. Lower earnings aside, experts have also raised concerns over India's ability to withstand competition from regional peers, which boast cheaper multiples while also having favorable demographics that support consumption growth. A strong contender is Hong Kong, which has seen a surge in listings and is reportedly attracting renewed interest from global funds. Vivek Subramanyam, founder and CEO of investment bank and asset manager TH Global Capital, estimates that the Nifty 50 is trading at a 60% premium to the Hang Seng Index and a 70% premium to its emerging market peers in Asia. "Regions like Taiwan and emerging Asia ex-China, with stronger growth prospects, could potentially outperform India," he said. Still, Subramanyam expects Indian companies' earnings per share in 2026 to grow at around 15% or 17% higher than that of its peers in emerging Asia and double that of those on the Hang Seng index. He expects Indian markets to "produce another single-digit gain" of up to 9% to 10% in the next six months. A trade deal between the U.S. and India — which is expected very soon — would allow for growth to come in at the higher end of the range as it would indicate a reduction in India's protectionist policies, Subramanyam explained. "India's valuations are certainly elevated compared to other emerging markets, and the short-term upside is limited. But I think the recent slowdown and ongoing recovery in growth make now a good time to selectively buy Indian equities in the medium to long-term," he added. As investors take bets on India, Subramanyam cautioned on the need to be careful when picking stocks. Subramanyam is looking out for companies with superior returns and what he calls "recurring revenues," which are predictable and sustainable over a 5-year period. One such company is Home First Finance Company India, which offers home loans catering to India's low and middle-income strata. "People are always going to need home loans. So, there is an inherent revenue stream for the company, which I think can compound in the next few years, given India's growing young population," Subramanyam explained. Marcellus' Gubbi is similarly looking at companies with strong balance sheets and cash, which can easily be deployed for R&D, advertising or even productivity-enhancing initiatives for staff, which can eventually yield better performance and earnings growth. I asked if he has a preference for value over quality stocks, and large- or small-cap names. He said, "I think value and quality have pretty good representation across market cap spectrums. You can't really say that all large cap stocks are quality, small cap is value." Large caps, Gubbi says, are trading at a discount to small caps as the latter have been seeing a "disproportionate amount of fund flows," partly because of investments by retail investors in domestic mutual funds. He has a bottom-up approach to stock selection, which is agnostic to sectors and market capitalization. Gubbi, however, added that flexi cap mutual fund managers are increasingly in favor of large caps over small-cap names when deciding allocations, "partly because valuations are still relatively lower." My takeaway from speaking to Subramanyam, Gubbi and Kevin Carter, founder of EMQQ Global, is consistent: India is a long-term play. Gubbi tells me that "predicting short term stock price moments is not just typical, it is futile to some extent." India, Carter added, is a place where every emerging market investor should have their money in. "India's population is bigger than all the other emerging markets combined, excluding China. So on paper, it is perfect. It's got the biggest population, the best demographics, the fastest growth, and that's driving consumption, so on paper, it's everything you could ever ask for," Carter added. The investor — whose focus is primarily on new age tech companies — says that Indian internet companies offer stronger growth momentum and attractive valuations than their emerging market peers, despite being a tad more expensive. Companies he is betting on include Eternal, the parent company of food delivery platform Zomato, travel platform Le Travenues Technology, also known as Ixigo, and recruitment and matrimony platform Info Edge. These companies are in the early innings of their growth, Carter says, adding that they have huge potential to grow their revenues and profits as Indian consumers become more affluent and spend more over the next decade or two. He foresees that Indian tech names will see a pickup in investor interest in the medium term, as investors look to rotate out of U.S. tech names, such as the so-called Magnificent Seven stocks, amid macroeconomic uncertainties and a weaker dollar. "India has solid digital public infrastructure and the best leaders running tech companies. So it's a perfect place for global investors to invest in, especially for internet companies, which are set to see a compounding in its growth," Carter added. Radhika Rao, senior economist at DBS, said there are positive signs that Indian markets could reach new highs. Rao is also optimistic that India can reach a deal with the U.S., but noted that New Delhi might not lower barriers on its agriculture sector too quickly. Sanjay Mathur, ANZ's chief economist for Southeast Asia and India, said that even if a trade agreement with the U.S. does not pan out, the hit to New Delhi's economy might not be too significant because trade "is a fairly small part" of India's growth.'Sensitive stage' of U.S.-India trade negotiations. India is pushing back against the U.S.' demand to access its domestic market for genetically modified crops, sources told CNBCTV-18. If the talks crumble, 26% tariffs are "imminent," another source said. Eight years of goods and service tax in India. Launched on July 1, 2017, the country's GST has transformed India's economy. CNBCTV-18 breaks down the various ways in which the tax has evolved since its inception and where it's headed in the future. Indian investigators retrieve Air India crash data. Black boxes that contain the cockpit voice recorder and the flight data recorder were recovered in mid-June. Investigators hope the information will provide insight into Air India's fatal crash on June markets were trading in positive territory on Thursday. The benchmark Nifty 50 was up 0.22% while the BSE Sensex index had risen 0.18% as at 12.35 p.m. Indian Standard Time. The benchmark 10-year Indian government bond yield had ticked up marginally to trade at 6.293%.July 4: India FX reserves July 9: Educational consultant Crizac IPO, India M3 money supply July 10: F&B consultant Travel Food Services IPO, U.S. Federal Open Market Committee minutes
The Star
24-06-2025
- Business
- The Star
Tourism dip fuels worst stock drop in Asia
Growing concerns: Travellers take photographs of planes from an observation deck at Bangkok's Suvarnabhumi Airport. Thailand's airport authority is grappling with shrinking duty free sales, fuelled largely by dwindling numbers of Chinese travellers. — Reuters BANGKOK: Thailand's post-Covid flood of tourists has turned into more of a trickle, adding to concerns for Airports of Thailand Pcl (AoT) as it grapples with shrinking duty free sales without a full-time chief executive officer. Its shares have more than halved this year, notching the steepest loss among any of the world's airport operators worth at least US$100mil, according to data compiled by Bloomberg. The tumble wiped out about 460.7 billion baht or about US$14.18bil of AoT's market capitalisation and made the stock the biggest loser on the MSCI Asia Pacific Index. The sell-off for what was once the world's most valuable airport operator is playing out as safety concerns rattle Thailand's tourism industry. Chinese travellers, key spenders at duty free shops and a major source of travel revenue, have turned away from the South-East Asian nation after the viral kidnapping of a Chinese actor in January stoked worries about security. 'Falling Chinese tourist arrivals and spending, driven mainly by safety fears, threaten to further reduce revenue from duty free shops and other commercial properties,' said Denise Wong, an analyst at Bloomberg Intelligence. 'A failure to adopt effective measures to reinvigorate Chinese demand will likely mean the current downtrend persists.' The government plans to trim its target of 37.5 million international visitors for this year after a 30% slump in Chinese tourists in the first four months, Teerasil Tapen, deputy governor of Tourism Authority of Thailand, said in May. Foreign tourist arrivals last month fell 13% from a year earlier, led by a drop in Chinese visitors. The dour outlook has clouded the so-called The White Lotus effect – a temporary boost in Western visitors inspired by the latest Koh Samui-set season of HBO's hit show. It also adds to economic risks for the country, where global tariffs and weak consumption have ravaged local equities. The nation's key benchmark stock index has slid about 20% this year, lagging most global peers. Still, the downturn in Chinese tourists will likely rebound in the second half of this year as the Thai government steps up efforts to lure those travellers again, according to Boonyakorn Amornsank, an analyst at Maybank Securities (Thailand) Pcl. In the meantime, the lack of Chinese arrivals is weighing on duty free sales. AoT reported a 13% decline in March quarter net income, mostly driven by a decrease in revenue sharing from duty-free shops and other commercial areas, the company said. Thailand's largest duty free shop operator King Power has asked AoT to cancel concessions at five airports, citing dwindling Chinese visitors as the main reason. The company's board will hire two external advisers to review the request from King Power, whose concessions contribute about 17% of AoT's total revenue, acting president Paweena Jariyathitipong said. The firm is searching for a new leader after former chief executive Kerati Kijmanawat quit in late April. At least four research houses have lowered their ratings on the stock since King Power made the concession plea last week, according to data compiled by Bloomberg. That follows at least three downgrades made last month after AoT's quarterly results. — Bloomberg
The Star
27-05-2025
- Business
- The Star
Asian shares start cautiously, dollar edges down
NEW YORK: Asian shares had a cautious open Tuesday (May 27) as investors awaited fresh trade news that may define the appetite for US assets. The MSCI Asia Pacific Index opened flat with marginal declines in Japan and South Korea. The dollar edged down in early Asian trade with a gauge of the greenback's strength hovering near its lowest level in almost two years on weak demand for US assets. The yield on the ten-year US Treasury fell two basis points while yields on Japan's 40-year sovereign slumped ahead of a bond auction. Contracts for the S&P 500 and Nasdaq 100 jumped over one per cent, holding their gains from a Monday holiday, after the European Union agreed to accelerate trade negotiations with the US. Tariff headlines are once again dominating the market and investors are closely watching how President Donald Trump's administration is dealing with Japan and India after talks with China earlier this month boosted optimism. Trade tensions and concerns of US fiscal position has weakened demand for US assets and are showing up the most in the dollar. "Any further tariff news could inject more volatility into currency markets and pull the dollar down,' Kristina Clifton, a senior economist and currency strategist at Commonwealth Bank of Australia wrote in note. Bloomberg's dollar spot index was track for its lowest close since July 2023, while the greenback is at or approaching key levels against a host of currencies including the euro, British pound, yen and Swiss franc. In Japan, yields on Japanese super-long bonds fell ahead of an auction Wednesday that is expected to test demand following a recent sale that sent jitters through global markets. Yields on 40-year and 30-year maturities slid ten basis points in Tokyo on Tuesday, adding to drops in recent days. These moves followed sharp gains in yields to record highs last week. Elsewhere, China's central bank asked its major lenders to raise the share of yuan when facilitating cross-border trade, in its latest push for the use of the currency as the world grapples with the onslaught of tariffs by the US. Trump's plan to bring more factories back to the US has President Xi Jinping's government also considering options to boost production of high-end technological goods. There will be close attention on the nation's electric vehicle sector, after BYD Co. introduced sweeping price cuts. Shares of China's No. 1 selling car brand tumbled 8.6 per cent in Hong Kong on Monday, sending shares of peers Li Auto Inc., Great Wall Motor Co. and Geely Automobile Holdings Ltd. also down amid investor concern about intensifying competition in the sector. A key event this week will be Nvidia Corp.'s results on Wednesday. The chip-making giant is seen as a bellwether for so called growth stocks and the sustainability of the artificial intelligence boom. Its outlook will be crucial given macro risks and tariff uncertainty. Investors are also gearing up for the Federal Reserve's preferred inflation measure, the US personal consumption expenditures price index excluding food and energy, which will be released Friday. The April reading is forecast to rise 0.1 per cent based on consensus expectations. In commodities, oil slipped on Tuesday after fluctuating in the previous session as the market weighed easing trade tensions against the outlook for rising OPEC+ supply. Gold traded steady. - Bloomberg
Time of India
27-05-2025
- Business
- Time of India
Asian shares start cautiously, dollar edges down
Asian shares had a cautious open Tuesday as investors awaited fresh trade news that may define the appetite for US assets . The MSCI Asia Pacific Index opened flat with marginal declines in Japan and South Korea. The dollar edged down in early Asian trade with a gauge of the greenback's strength hovering near its lowest level in almost two years on weak demand for US assets. The yield on the 10-year US Treasury fell two basis points while yields on Japan's 40-year sovereign slumped ahead of a bond auction. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Girls Show Their Perfect Figure In These Sport Photos Take At Perfect Time True Edition Undo Contracts for the S&P 500 and Nasdaq 100 jumped over 1%, holding their gains from a Monday holiday, after the European Union agreed to accelerate trade negotiations with the US. Markets were closed in the US for a holiday Monday. Tariff headlines are once again dominating the market and investors are closely watching how President Donald Trump's administration is dealing with Japan and India after talks with China earlier this month boosted optimism. Trade tensions and concerns of US fiscal position has weakened demand for US assets and are showing up the most in the dollar. 'Any further tariff news could inject more volatility into currency markets and pull the dollar down,' Kristina Clifton, a senior economist and currency strategist at Commonwealth Bank of Australia wrote in note. Live Events Bloomberg's dollar spot index was track for its lowest close since July 2023, while the greenback is at or approaching key levels against a host of currencies including the euro, British pound, yen and Swiss franc. In Japan, yields on Japanese super-long bonds fell ahead of an auction Wednesday that is expected to test demand following a recent sale that sent jitters through global markets. Yields on 40-year and 30-year maturities slid 10 basis points in Tokyo on Tuesday, adding to drops in recent days. These moves followed sharp gains in yields to record highs last week. Elsewhere, China's central bank asked its major lenders to raise the share of yuan when facilitating cross-border trade, in its latest push for the use of the currency as the world grapples with the onslaught of tariffs by the US. Trump's plan to bring more factories back to the US has President Xi Jinping's government also considering options to boost production of high-end technological goods. There will be close attention on the nation's electric vehicle sector, after BYD Co. introduced sweeping price cuts. Shares of China's No. 1 selling car brand tumbled 8.6% in Hong Kong on Monday, sending shares of peers Li Auto Inc., Great Wall Motor Co. and Geely Automobile Holdings Ltd. also down amid investor concern about intensifying competition in the sector. A key event this week will be Nvidia Corp. 's results on Wednesday. The chip-making giant is seen as a bellwether for so called growth stocks and the sustainability of the artificial intelligence boom. Its outlook will be crucial given macro risks and tariff uncertainty. Investors are also gearing up for the Federal Reserve's preferred inflation measure, the US personal consumption expenditures price index excluding food and energy, which will be released Friday. The April reading is forecast to rise 0.1% based on consensus expectations. In commodities, oil slipped on Tuesday after fluctuating in the previous session as the market weighed easing trade tensions against the outlook for rising OPEC+ supply. Gold traded steady.
Time of India
02-05-2025
- Business
- Time of India
Asian stocks edge up, US futures erase losses on China trade talks
Asian stocks edged up and US equity-index futures erased losses Friday after China said it's evaluating possible trade talks with the US. The MSCI Asia Pacific Index gained 0.1% after China's Ministry of Commerce said it's evaluating negotiations. Japanese shares gained 1.1% on positive comments from Japan's chief trade negotiator. Futures contracts for the S&P 500 reversed earlier losses to gain 0.2%. News of trade talks between China and the US helped reverse weak sentiments after disappointing results from Apple Inc. and Amazon Inc. had hurt sentiments early Friday. Strong tech earnings had largely driven optimism on Wall Street along with expectations that trade deals will offer many countries a reprieve from the highest tariffs unveiled April 2. Traders will turn their attention to the US jobs report that releases Friday, the last piece of significant data this week. 'Results from Amazon and Apple are a bit of a damper on the markets,' wrote Kyle Rodda, senior market analyst at 'The final hurdle for the week is the non-farm payroll data.' Apple shares slipped in late US trading after it reported sales from China declined more than anticipated in the latest quarter, overshadowing otherwise solid results. Meanwhile, Amazon gave an operating income forecast that missed expectations when markets closed, pushing shares lower in post-market trading. Live Events Microsoft Corp. and Meta Platforms Inc. jumped on upbeat earnings, while a report of the US weighing a potential easing of restrictions on Nvidia Corp.'s sales to the United Arab Emirates pushed the chip-maker's shares higher during Thursday's session. A dollar index climbed Thursday on reports that President Donald Trump's administration reached out to China to start tariff talks. In Asia, the yen slipped against the dollar as the Bank of Japan said it will take longer than it previously thought to hit the inflation target, leading traders to pare bets on further interest-rate hikes. Meanwhile, Japan's Finance Minister Katsunobu Kato said that the country's US Treasury holdings could be a card in its trade negotiations with the US, in response to a question asking whether Japan's stance of not easily selling the holdings could be seen as a negotiation tool. 'It does exist as a card,' said Kato, speaking on a TV Tokyo program Friday, when asked if Japan's stance of not selling holdings could be a negotiation tool. 'Whether or not we use that card is a different decision.' In commodities, gold dropped to a two-week low while crude oil fell 0.7%.
