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Time of India
02-06-2025
- Business
- Time of India
An $84 billion short book is putting pressure on India's rupee
The Indian rupee is emerging Asia's worst performer this quarter and may continue to lag peers as the central bank aims to avert a depletion in its foreign-exchange reserves , according to analysts. The Reserve Bank of India had dollar repayments near a record high of $84.3 billion as of March as indicated by its net short forwards position, a measure of the amount of greenback it has agreed to sell at a future date. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Đây là Chi phí Cấy ghép Nha khoa Toàn bộ Miệng Cấy ghép răng | Quảng cáo tìm kiếm Tìm hiểu thêm That may pile pressure on the RBI to buy dollars to prevent a drain on its reserves and lead to the rupee falling to 86.50 per dollar by end-December, according to IDFC First Bank Ltd . The currency is likely to weaken to 87.50 per dollar from 85.5813 on Friday, according to estimates by Commerzbank AG. The rupee is on track to 'underperform even as the dollar remains under pressure,' Barclays Bank Plc strategists including Mitul Kotecha wrote in a note. The RBI is expected 'to be focused on replenishing its FX buffers while allowing its forwards book to run off.' Bloomberg Live Events The RBI will likely avoid keeping a large book as it represents a large potential drain on reserves, said Gaura Sen Gupta, chief economist at IDFC First Bank. The rupee has fallen 0.1% this quarter, missing out on a rally against the dollar that has lifted other emerging Asian currencies amid outflows from India's bond market. RBI Governor Sanjay Malhotra has been more flexible in allowing the currency to transition to a more market-determined trading regime. Reserves are expected to cushion volatility in the exchange rate and build resilience to the increasing reoccurrence of geopolitical and economic shocks, the central bank in a report last week. The RBI's short dollar book up to three months stood at about $24 billion while the three-month to one-year bucket was at $40 billion, according to central bank data. Those payments, if not rolled over, may lead to depleting reserves. India's foreign-exchange reserves stood at about $693 billion as of May 23, lower than the all-time high of $705 billion reached in September last year. Still, the uthority has been less interventionist in recent months and may step in only at the extreme ends of the 84-87 range, said Vikas Jain, head of India fixed income, currencies and commodities trading at Bank of America. Traders will look forward to RBI's policy on June 6, where it's expected to cut interest rates by a quarter point, according to Commerzbank AG.
Time of India
28-05-2025
- Business
- Time of India
Nvidia to have final say on strong earnings season for Big Tech
Nvidia Corp. faces the final test of an earnings season-driven rally that has sent its shares up more than 40% from an April low. The world's most valuable chipmaker reports Wednesday after market close — the last of the Big Tech cohort to do so. Results from Microsoft Corp., Meta Platforms Inc. and others showed that outlooks remain mostly intact despite uncertainty caused by President Donald Trump's shifting tariff plans. The reports, along with cooling trade tensions, have helped fuel a rebound in technology stocks that were at the heart of last month's S&P 500 rout. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Unbelievable: Calculator Shows The Value Of Your House Instantly (Take a Look) Home Value Calculator Learn More Undo 'Tech results have generally been positive, and in some cases, exceptional,' said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. 'I think continued strength in Nvidia will support the overall tech trend.' Bloomberg Live Events Nvidia shares have soared as its biggest customers pledge to keep spending heavily on equipment for artificial intelligence computing and as new buyers emerge from governments in the Middle East. The stock remains down 9% from its January peak. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories The focus in the firm's first-quarter earnings report will be the supply of computer systems based on its new Blackwell chips, which faced manufacturing hiccups that hampered sales in the fourth quarter amid heavy demand. The Santa Clara, California-based company is projected to deliver around $19 billion in net income on revenue of $43 billion in the first quarter, up 31% and 66%, respectively, from the same period a year ago. Another thing investors will be watching closely is profit margins. In February, Nvidia said higher costs associated with the ramp up of Blackwell production would weigh on gross margins in the first quarter. Gross margins should return to the 'mid-70s' by the end of the year from a projection of roughly 71% in the first quarter, Chief Financial Officer Colette Kress said at the time. 'We did see a slowdown in margins last quarter and if we see them shrink again, that could bring the stock down,' said Andrew Rocco, a stock strategist at Zacks Investment Research. 'I don't think we'll see a huge surprise with this report one way or the other but there is a risk with the outlook.' The earnings report has the potential to be complicated owing to US export restrictions of advanced semiconductors to China aimed at slowing the country's technological progress. Last month, Nvidia wrote off about $5.5 billion in inventory of chips designed explicitly to comply with previous US curbs. Chief Executive Officer Jensen Huang has criticised the US policies, which he said will cede a market that could be worth $50 billion in 2026 to Chinese rivals. Wall Street estimates appear to vary widely on the impact of the restrictions, creating the potential for a 'messy' quarter, Morgan Stanley analysts led by Joseph Moore wrote in a research note published Tuesday. Nvidia and other technology giants were among the biggest decliners in last month's rout that sent the S&P 500 to the brink of a bear market. Many of the stocks have recouped much of the losses after Trump temporarily paused the stiffest levies and earnings showed demand remains intact. The Nasdaq 100 Index is outperforming the S&P 500 since the reporting cycle kicked off in mid-April. This earnings season has shown that the biggest buyers of AI computing gear plan to keep plowing money into capital spending, a boon for Nvidia and other makers of computing hardware. Microsoft and Alphabet pledged to spend even more next year, while Meta raised its forecast for capital expenditures in 2025. 'It is remarkable how much we've almost come full circle in a few weeks,' said Rob Almeida, global investment strategist at MFS Investment Management. 'The fact that hyperscalers still think they can't afford to not invest is a pretty strong signal for their intentions over the next four quarters.' Despite the rebound in Nvidia shares, the stock's valuation relative to anticipated earnings remains at a discount. Nvidia is priced at 29 times profits projected over the next 12 months, compared with a five-year average of 40, according to data compiled by Bloomberg. The Nasdaq 100 trades around 26 times projected profits. Bloomberg For Krishna Chintalapalli, a portfolio manager at Parnassus Investments, the attraction to Nvidia as the biggest beneficiary of AI spending remains strong. 'I haven't seen anything in the past three months that would suggest the story has dramatically changed,' Chintalapalli said. 'While China is a factor, the Middle East deals suggest broad-based demand for Nvidia chips beyond the US and China.'
Time of India
29-04-2025
- Business
- Time of India
D-Street's $489 billion rally is winning back global funds
Global funds are returning to Indian stocks, signaling that this month's rally in Asia's best-performing equity market likely has more legs. Having largely been sellers in the months since Indian benchmarks scaled records in September, foreigners are coming back amid growing optimism that a domestically-driven economy will make the South Asian nation withstand the global trade war better than most peers. A sharp advance from this month's low already boosted India's market's value by $489 billion to nearly $4.4 trillion at the end of last week. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Google Brain Co-Founder Andrew Ng, Recommends: Read These 5 Books And Turn Your Life Around Blinkist: Andrew Ng's Reading List Overseas funds bought $589 million of Indian shares on a net basis last Friday, marking an eighth straight day of purchases, according to data compiled by Bloomberg. The buying streak means they have now invested about $680 million in April. At one point, they were sellers of more than $3 billion for the month. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. 'Foreigners are coming back as India is perceived to be relatively better placed than other emerging markets due to its faster economic growth despite the trade war,' said Sneha Tulsyan, an investment analyst at Tokio Marine Asset Management International Pte. in Singapore. Expectations of further monetary easing and moderating crude oil prices will continue to drive a 'positive narrative' for India, she said. Bloomberg Live Events Global money was the missing piece in India's recent rebound that was aided by purchases from local investors, an interest-rate cut and also the central bank's cash injections — which wiped out a monthslong cash deficit in the financial system. Money managers at Franklin Templeton and Federated Hermes have in recent days touted India as a bright spot amid global tariff uncertainties, while UBS Group AG has abandoned its long-held bearish view on the market. Sentiment may get a further lift from US Treasury Secretary Scott Bessent's latest comments, who said in an interview with CNBC that he wouldn't be surprised if a trade deal with India is the first to be announced. The benchmark NSE Nifty 50 Index has risen over 3% in April, almost double the gain in the broader MSCI Asia Pacific Index. The challenge for Indian stocks comes from relatively expensive valuations as well as rising tensions with neighboring Pakistan after last week's militant attacks in the northern region of Kashmir that killed 26 people. Some analysts have also warned of the risk of earnings downgrades for the market. Bloomberg For now, investors are looking past those concerns, with the benchmark jumping the most since April 17 on Monday. 'Foreigners will continue to chase India as it offers fantastic opportunity to capture strong demographics, economy and upcoming global supply chains,' said Sumeet Rohra, a fund manager at Smartsun Capital Pte. 'Any dip due to the border tension will be an opportunity to add.'
