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Strong mkt leadership, robust demand should help IndiGo stock gain altitude
India is expected to see close to 10 per cent CAGR in passenger volumes over next two-three years and it is among the lowest penetrated markets per capita despite being the third-largest
Devangshu Datta Mumbai
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India's civil aviation sector has strong growth trends in the medium to long term, but geopolitics has had a short-term impact on international travel. Many flights were cancelled during the Iran-Israel conflict and there are fears of crude supply disruptions, causing price volatility to a key input. In addition, the crash at Ahmedabad has led to Boeing 787 fleets being grounded, causing further flight disruptions and it has also led to Air India being badly hit due to 787 exposures.
India is expected to see close to 10 per cent compound annual growth rate (CAGR) in passenger volumes over the
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The Hindu
3 hours ago
- The Hindu
Letters to The Editor — June 27, 2025
Conflict and aftermath The Iran-Israel conflict has virtually left the nuclear non-proliferation treaty in tatters. Meanwhile, a well-scripted agenda of genocide continues in Gaza. It is another matter that the Ukraine war — which U.S. Preisident Trump had famously promised to end in '24 hours' upon taking office — has been relegated to the background. C.G. Kuriakose, Kothamangalam, Kerala The direct involvement of the U.S. in the conflict is an indication that the U.S. is trying to reassert its supremacy through intimidation. Iran cannot be underestimated, as it too has friends. U.S. President Donald Trump should concentrate more on the state of America's economy. Govardhana Myneedu, Vijayawada, Andhra Pradesh Software testing I wish to highlight a critical shift in software testing in the IT industry. As demand for efficient, scalable solutions grows, automation testing is becoming essential. The future of software quality assurance lies in automation, which offers faster, error-free testing, especially for tasks such as validating chatbots with numerous queries. Firms must invest in upskilling staff in automation tools and coding to drive productivity and innovation. By embracing this shift, businesses can improve testing efficiency and empower staff to meet the challenges of the tech industry. Vivek M. Jain, Chennai
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Business Standard
3 hours ago
- Business Standard
Dubai, Abu Dhabi remain calm, thrive amid Iran-Israel tensions
The United Arab Emirates has managed to thrive during global instability, drawing capital during the Arab Spring, opening up quickly during the pandemic and attracting Russian money after Moscow's invasion of Ukraine. But the Iran-Israel confrontation, which involved the US, poses one of the most stringent tests yet to the country's neutral and open-for-business stance. By Tuesday morning, just hours after Iran hit a US base in nearby Qatar and the UAE briefly closed its airspace, it was already business as usual in the financial centers of Dubai and Abu Dhabi. An executive at one of Abu Dhabi's wealth funds said it was proceeding as planned with deals and investments, even encouraging foreign executives to visit for meetings. In Dubai, bankers were quick to relay optimism that the UAE would sidestep any major fallout. But while a ceasefire announced by US President Donald Trump appears to be holding, some executives acknowledge an undercurrent of nervousness because the geopolitical risks of the Middle East have come so sharply to the fore. The stakes for the global financial community are particularly high in the UAE, which has attracted international billionaires looking to safeguard their wealth as well as Wall Street banks and hedge funds looking to expand. Abu Dhabi has been on a dealmaking spree with its $1.7 trillion sovereign wealth pile. Meanwhile, Dubai's property prices have surged 70% over four years propelled by buyers from around the world. 'I think the current situation is contained. But what happened is significant — it's a signal that no action is off-limits anymore,' said Hussein Nasser-Eddin, chief executive of Dubai-based security services provider Crownox, referring to the attack in Qatar, which like the UAE is a long-time ally of the US. Nasser-Eddin said his firm — which provides travel security, protective and risk advisory services — has seen a rise in contingency planning requests in the Gulf in the last couple days. Companies have asked for details of Crownox's cross-border capabilities, essentially wanting to know if it could 'save the day' if things went wrong, he said. Even such lingering concerns haven't been enough to deter those investing or living in the UAE. More than a dozen bankers, hedge fund and sovereign wealth fund executives interviewed by Bloomberg News said they haven't seen signs of capital flight or firms considering a pullback. They asked not be named because they weren't authorized to speak to the media. UAE stocks, which sank at the outbreak of the Israeli strikes on Iran, have not just recouped those losses but scaled new highs in tandem with US stocks. Dubai's equity benchmark is trading almost 3% higher than before the conflict, reaching the highest level since the 2008 global financial crisis. Abu Dhabi's index has added more than 1% and is at the highest since January. Both indexes are rising faster than the global benchmark MSCI ACWI. 'I believe that the safe-haven status will continue, the macro story remains robust and the reform program compelling. We continue to expect capital and population inflows in the medium-term,' Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, said about the UAE. 'The fact that there were no economic disruptions and the ceasefire are positive.' Historically, Dubai has benefitted from periods of unrest not just regionally but elsewhere too. Most recently, after the invasion of Ukraine in 2022, some Russians bought Dubai real estate. Property prices have been shooting up since the pandemic. Still, the emirate's population is largely made of expatriates and any pullback from them would also dent the housing market, which makes up more than a third of the city's gross domestic product. 'We had a period of 48 hours where buyers were reluctant to pull the trigger,' said Myles Bush, chairman of brokerage Phoenix Homes. 'However, now it's business as usual and buyer confidence has bounced back.' While market sentiment hasn't been affected so far, a resumption of hostilities may shake confidence, said Anna Kirichenko, a property broker who has worked in Dubai since 2007. There is also the potential for other economic fallout. Despite airspace closures ending and the ceasefire, several global airlines are still avoiding Dubai to ensure the safety of crew and passengers amid geopolitical tensions. Among them are Singapore Airlines, Air India Ltd. and United Airlines Holdings Inc. The aviation sector supported 27% of Dubai's GDP in 2023, according to a report by Emirates, contributing nearly $40 billion to the city's economy. Dubai and Abu Dhabi have in recent years attracted expatriates and financial firms partly because of the UAE's easy visa policies, low taxes and convenient time zone between East and West. The regulator for Dubai's financial center said it had contacted a number of firms, who reported normal business activity. A management consultant said it would take a far more devastating strike — such as one on a population center — to derail the UAE's haven status and its internationalization drive. IPO bankers in the UAE have said that their post-summer pipeline hasn't been affected by the geopolitical turmoil. Even in nearby Doha, the capital of Qatar, one banker said work had resumed as if the attack on the US base had never taken place. To be sure, plenty of risks remain. Even after the truce was announced, there appeared to be early breaches by both sides that caused Trump to issue angry warnings. US intelligence findings have also shown that American air strikes had only a limited impact on Iran's nuclear program, while Trump has maintained the sites were completely destroyed. Still, executives were reassured because Iran appeared to have provided warnings before the attack and the UAE — which also houses US military personnel — wasn't targeted. The chain of events suggests that officials in the Gulf had been able to manage the crisis from behind the scenes, one Dubai-based portfolio manager said. Ken Moelis, the veteran Wall Street dealmaker with close ties to the Middle East, characterized turbulence in the region as an opportunity for one of the most optimistic changes in the Gulf for a long time. He highlighted opportunities such as the potential impact of unlocking Iranian oil reserves and opening up the country's labor market, assuming sanctions are lifted. 'All I hear about is what if the peace doesn't hold,' Moelis said in an interview on Bloomberg Television Wednesday. 'I haven't heard one person say, 'What if the 90 million population of highly educated motivated Iranians come into the market?'' (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Mint
4 hours ago
- Mint
Stocks surge, crude oil dips as war cries fade
Indian benchmark indices rose to reclaim levels last seen nine months ago, as investors cheered lower oil prices, a weaker dollar, and strong domestic flows back home. Market experts believe the combination bodes well for the bulls in the near term at least. As a ceasefire in West Asia after 11 days of conflict took hold, markets bet that the worst of the disruption was behind. The Nifty closed 1.21% or 304.25 points higher at 25,549, while the Sensex closed 1.21% or 1,000 points up at 83,775.87. Thursday's closing was the highest since 1 October when the Nifty traded at 25,796.9 and the Sensex at 84,266.29. The gains were led by HDFC Bank , Reliance Industries, Bharti Airtel, ICICI Bank and Bajaj Finance, which together accounted for almost three-fifths of the Nifty's gains. Reliance Industries' market capitalization crossed ₹20 trillion for the first time in nine months to touch ₹20.23 trillion. It stood at ₹20.65 trillion on 27 September last year, when the Nifty touched a record 26,277.35. Dollar, derivatives Thursday's rally coincided with the expiry of the June series of derivatives—each series closes on the last Thursday of a month—which saw the Nifty gain almost 3% from 24,833.6 at the May expiry to 25,549 at the June expiry. As per provisional data from NSE, FIIs net bought shares worth ₹12,692 crore on Thursday, their highest single-day purchase since 28 June 2023. What aided the rally was the fall in the dollar index—which measures the greenback against a basket of six currencies including the euro, pound and yen—to a one-year low of 97.22. A weaker dollar boosts returns from risky emerging market equities. Added to that was the cooling in Brent crude from $78.85 a barrel on 19 January at the height of the Israel-Iran conflict to $68.5 at the time of writing on Thursday. Global risk-on "Lower oil, dollar, cut in interest rates back home and rising domestic equity inflows have aligned Indian stocks with global peers, which are on a global risk-on," said Nitin Jain, CEO & CIO, Kotak Mahindra Asset Management Singapore. Interestingly, Jain said that not just mutual funds, other domestic institutional investors (DIIs) were also pumping money into Indian stock markets. In the first five months of 2025 through last Friday, net inflows of DIIs other than mutual funds, stood at $13 billion, more than the $11 billion invested in the whole of 2024. "This shows that not just MFs, but banks, insurance and pensions funds are upping the ante," he said. Cooling crude Cheaper crude benefits India, which imports 85%, or 5.5 million barrels per day, of its oil requirement. Investors turned richer by ₹3.5 trillion after Thursday's rally. Options data for the week ending 3 July indicate a 3% range for the market from 25210 to 25890, with a bias to the higher end of the range. This is supported by fear gauge India Vix falling to a three-month low of 12.59. The yearly average of the index is 15.52. A lower reading indicates confidence while a higher reading implies rising risk-off sentiment. In the past two days, global oil prices—particularly Brent—have cooled off, dropping below $70, which reflects easing geopolitical tensions, which had posed a major uncertainty for India, said Sachin Shah, executive director and fund manager at Emkay Investment Managers. With crude now below that threshold, a key risk appears to have receded, Shah added, saying that as far as geopolitical concerns go, India seems to be in a safe zone. What's next Moving ahead, earnings season, the return of global capital and further easing of crude prices will be the key triggers for Indian markets, say experts. "After three weak quarters in FY25, Q4 showed signs of stabilization. A supportive macro backdrop—driven by RBI's liquidity infusion and a deeper-than-expected rate cut—is expected to boost credit demand, which has been historically low. This sets the stage for a gradual earnings recovery," said Christy Mathai, fund manager at Quantum Mutual Fund. Also, the consensus for FY26 earnings growth of 10–11% appears achievable, especially with improving monsoons, rising rural income, and easing inflation, Mathai added. Shah from Emkay Investment Managers added that there may be a potential shift of global capital into emerging markets like India, as investors sell dollar assets and reallocate across geographies and asset classes. "So far, FII inflows remain muted, but any pickup could significantly boost sentiment," he said. Vinay Jaising, CIO and head of equity advisory at ASK Private Wealth said that FII ownership is at a 12-year low of around 16%, creating room for re-entry. Additionally, crude oil dropping below $65—well under India's $80 comfort zone—will further aid in containing inflation and managing fiscal deficits, Shah said. Strong outlook Jaising of ASK Private Wealth said the outlook for Indian equity markets remains strong going ahead. Domestic inflows, particularly from retail investors, are structurally strong and here to stay, as retail India's contribution to GDP via household savings has jumped from ₹0.4 trillion in 2014 to ₹4 trillion today equating to 1.3% of GDP—a 10x rise, Jaising said. "The rupee remains firm amid US political and debt concerns, while India's risk premium has declined. With earnings downgrades likely behind us and revisions likely ahead, the outlook seems strong," Jaising added.
