Limited gains: on the inflation space
The RBI expects inflation to pick up only from January 2026. But there is no time for complacency. While India is far from being in a persistent low-inflation, low-growth stagnation, it is staring at a growth slowdown. The latest growth in the Index of Industrial Production was at a 10-month low, with capital and consumer goods activity anaemic. Growth in GST revenue slowed to single-digits in June and July. The contraction in gross direct tax collections this financial year is also concerning. Car sales to dealers dropped to an 18-month low in June. UPI transactions, touted in the past as a sign of buoyant economic activity, fell as compared to the previous month thrice so far in 2025. The RBI has retained its forecast of 6.5% growth this financial year, which looks optimistic. Even if the U.S.'s additional 25% tariffs are removed, the initial 25% will themselves likely reduce India's growth by 0.2 percentage points. India's growth is not robust enough for it to be blasé about such a loss. Structural problems remain, demand is still weak, and a temporary dip in inflation is in itself not going to help much.
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Hindustan Times
6 minutes ago
- Hindustan Times
No Ukraine Cease-Fire From Putin
President Trump tried to put the best spin he could Friday on his summit with Vladimir Putin in Alaska, and the mutual pleasantries were effusive. But the substantive news from the meeting seems to be that Mr. Putin refuses to end his war in Ukraine, and he won't even agree to a temporary cease-fire. The killing that Mr. Trump rightly abhors will apparently continue. Mr. Trump was full of praise for Mr. Putin and said the two 'made some great progress today,' though 'we didn't get there' to an agreement. He offered no details about the 'progress' and announced no end to hostilities. He said they agreed on many things but not on the biggest areas, which presumably means a cease-fire and any compromises on Mr. Putin's war aims. There will be some cautionary relief in Europe that Mr. Trump didn't announce a deal with Mr. Putin that he would present to them as a fait accompli. Instead Mr. Trump said he would call European allies and Ukraine's Volodymyr Zelensky to brief them on what happened in Alaska. There's no deal, he said, until there's a final deal, which suggests he is at least listening to what Ukraine needs to feel secure if an armistice is reached. Mr. Putin for his part gave nothing away on Ukraine. He offered his familiar line that the 'root causes' of the war must be addressed before it can end. By this he means blaming Ukraine for wanting to determine its own future as part of the European Union with security help from NATO countries. It was notable that Mr. Putin spent most of his soliloquy in front of the press flattering Mr. Trump, endorsing the U.S. President's view that the war would never have happened if Mr. Trump had been in office in 2022, and extolling the possibilities for U.S.-Russia business ties. With his economy struggling, Mr. Putin wants financial relief. In that sense the Russian achieved one of his major goals from the summit, which is the start of his rehabilitation as a world leader. The summit ended his isolation from the West, and he gave up nothing for it. He also appears to have gained more time to continue bombing Ukrainian cities and slowly taking more territory. It isn't clear what Mr. Trump gained. He had told the press that he would be angry if no cease-fire emerged from the parley, but Mr. Trump showed no pique afterward. Perhaps there was some quiet concession Mr. Trump will take back to Ukraine, and if so we will know that soon enough. If there was nothing but niceties and a Putin stonewall, then Mr. Trump will have to decide if he will follow through on the red lines he has drawn. On Wednesday he had promised 'very severe consequences' if Mr. Putin didn't agree to end the war. Will he now move to impose sanctions on such buyers of Russian oil as China and Turkey as he has India? Or will he agree to a second summit, as Mr. Putin seems to want, in hope that next time will be different? Mr. Trump's desire to be a peacemaker is laudable, but in Vladimir Putin he is dealing with a hard man who has his eyes fixed on conquering Ukraine sooner or later. Mr. Putin will only bend from that goal if he sees a unified West determined to deny him that victory and willing to impose severe costs if he continues his march of death in Ukraine.
Economic Times
6 minutes ago
- Economic Times
US stock market: How has S&P 500 managed to beat Donald Trump tariffs and climbed historic highs? Check forecast for 2025
Synopsis Citi raised its forecast for where the S&P 500 will finish the year, joining Bank of America, Goldman Sachs, Deutsche Bank and others that raised their targets recently. Those forecasts, however, cluster around where the index stands now -- mostly between 6,300 and 6,600, with Thursday closing at 6,469. Global Desk US stock market today: US Stock Market's top index S&P 500 has continued to hit new highs. The index has recovered all the ground it lost in the global market sell-off in April, after Trump announced sweeping tariffs. It is now more than 5 per cent above its last peak, in February, and almost 10 per cent higher for the year. For the time being, the economic reality of tariffs has yet to catch up with the market's earlier worries. The effective tariff rate on U.S. imports is the highest it has been since the 1930s, upending supply chains, stoking inflation concerns and underpinning an intensifying war of words between President Donald Trump and Federal Reserve Chair Jerome profits remain strong, and the economy, despite worries about what's to come, is still solid. There are pockets of weakness, but the biggest companies that drive the S&P 500's performance have been largely insulated against further impact from tariffs, propelled instead by the growth of artificial intelligence."There is a case to be made there that we are through the worst of it," said Stuart Kaiser, an equity strategist at most companies in the S&P 500 having already reported earnings for the three months through June, the average growth rate of the companies in the index nudged into double digits for the third quarter in a row, according to data from tech companies again led the way, helping to justify their high stock prices. A further contraction in the energy sector, alongside the continued malaise for manufacturers, paled in comparison with the growth of the tech juggernauts. And while retailers and other companies that deal directly with consumers have complained about tariffs, the broad message among the big businesses that make up the S&P 500 is that they are manageable."This earnings season has allayed a lot of fears," said Nelson Yu, head of equities at Alliance the end of the first quarter, just 17% of companies raised their expectations for how they would perform going forward, according to Citi. Many executives simply refrained from offering financial projections, citing uncertainty surrounding the Trump administration's tariff this quarter, more than 40% of companies in the index raised their earnings estimates, anticipating a more favorable environment than previously expected."Companies are telling you they have more clarity, because otherwise they wouldn't provide that guidance," Kaiser much like investors, loathe uncertainty because it prevents planning and making major decisions. At least with the tariffs roughly in place, there is a sense among executives that the picture is becoming month, Citi raised its forecast for where the S&P 500 will finish the year, joining Bank of America, Goldman Sachs, Deutsche Bank and others that raised their targets recently. Those forecasts, however, cluster around where the index stands now -- mostly between 6,300 and 6,600, with Thursday closing at 6,469 -- pointing to an expectation that the rally will slow the rest of the year and underscoring lingering recovery from the stock sell-off in April is less pronounced in other Russell 2000, which is made up of smaller companies less able to absorb the effects of higher tariffs, is just one index that hasn't shown the same roaring recovery as the S&P Russell turned positive for the year after this past week's inflation report showed only a modest impact so far from tariffs, cementing expectations that the Fed will soon cut interest rates as it starts to slowly take the brakes off the economy -- albeit more slowly than the president would interest rates are generally seen as positive for the stock market, but if inflation speeds up significantly, the central bank will be less inclined to keep cutting rates, tempering the forecast for many of the companies that make up the Russell 2000 (and even some in the S&P 500).That wariness has kept many larger fund managers from diving back into the stock market as enthusiastically as retail investors have, according to research from Deutsche Bank. If those hesitant investors return to the market, that could add a tail wind in the second half of the year. But the lack of activity also underlines that not everyone is convinced that the current rally is sustainable.
Economic Times
22 minutes ago
- Economic Times
India commends push for peace by Donald Trump and Vladimir Putin
Synopsis India lauded the US-Russia summit in Alaska, emphasizing dialogue and diplomacy for resolving the Ukraine conflict. The MEA urged Ukraine and the EU to prioritize a swift peace settlement. Trump hinted at a possible delay in implementing additional tariffs on India for Russian oil imports, following productive talks with Putin, signaling potential relief from further sanctions. PTI **EDS: THIRD PARTY IMAGE** In this image posted by @mfa_russia via X on Aug. 16, 2025, US President Donald Trump and Russian President Vladimir Putin during a joint press statement after their meeting, at Joint Base Elmendorf-Richardson, in Anchorage, Alaska. (@mfa_russia on X via PTI Photo) (PTI08_16_2025_000200B) New Delhi: India on Saturday welcomed the Summit meeting in Alaska between US President Donald Trump and President Vladimir Putin of Russia and noted that their leadership in the pursuit of peace is highly commendable. "India appreciates the progress made in the Summit. The way forward can only be through dialogue and diplomacy. The world wants to see an early end to the conflict in Ukraine," MEA spokesperson said in a statement. This in a indirect message to both Ukraine and the EU to focus on an early peace settlement instead of dragging the war. Highly placed told ET that the ball is now in the courts of Ukraine and EU to work towards peace and final settlement. Earlier India had endorsed the Summit and suggested that it can contribute to the efforts. India is hoping that a ceasefire could lift additional 25 per cent tariffs imposed on it on account of buying Russian oil which Trump claimed is fuelling "war efforts". Meanwhile US President Donald Trump has suggested he may put off implementing secondary or penalty tariffs as a result of the talks with Russian President Vladimir Putin indicating that India may not be facing any extra secondary sanctions over and above 50 % tariffs. In an interview to US's Fox News after the talks, Trump said that he would consider the question of the penalty tariffs on Russian oil in "two or three weeks". Asked about tariffs on China which imports even more oil than India, Trump said that "because of what happened today, I think I don't have to think about that now," adding, "I think you know, the meeting [with Putin] went very well".
