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Reuters
10 hours ago
- Business
- Reuters
Indian equity benchmarks set to open higher tracking Asian stocks
June 5 (Reuters) - India's benchmark indexes are likely to open higher on Thursday, mirroring gains in Asian peers, while Treasury yields and the U.S. dollar dipped. Gift Nifty futures were trading at 24,733.5 as of 8:00 a.m. IST, indicating a firm start above Nifty 50's (.NSEI), opens new tab previous close of 24,620.2. MSCI Asia ex Japan (.MIAPJ0000PUS), opens new tab was up 0.8%, led by South Korean shares, which rose to an 11-month high on post-election optimism, and Hong Kong stocks. U.S. stocks ended mixed overnight, while Treasury yields and the dollar fell, as data showed a contraction in the services sector for the first time in a year. Investors now await U.S. employment data due later in the week. Yields move inversely to prices, and lower yields bode well for equities in emerging markets such as India. Foreign investors snapped a three-day selling streak in India on Wednesday as they bought shares worth 10.76 billion rupees ($125.3 million), as per provisional data. Meanwhile, domestic institutional investors remained buyers for the twelfth session in a row. Back home, investors are waiting for the Reserve Bank of India's policy decision on Friday, where it is widely expected to cut key lending rates by 25 basis points for a third straight meeting. ** Hindustan Aeronautics ( opens new tab says it is in talks with General Electric engines for the LCA Mark 2 aircraft, adds it is not negotiating with any other companies for the engine ** The National Company Law Tribunal approves the merger of Fusion Cosmeceutics and Just4Kids Services with Honasa Consumer ( opens new tab ** Force Motors ( opens new tab posts rise in both domestic and total sales in May ** Gland Pharma ( opens new tab says France's medical regulator issued a final report with 11 observations for Cenexi's manufacturing unit
Wall Street Journal
a day ago
- Business
- Wall Street Journal
Global Investors Have a New Reason to Pull Back From U.S. Debt
Foreign investors have plenty of reasons to be wary of U.S. government debt at the moment. Now there is another: They can often receive better returns buying bonds in their own countries. The risk of a weaker U.S. dollar and the cost of protecting against that risk, are making American assets less attractive around the world. That comes at a bad time for the U.S. Treasury market, which is already contending with a darkening U.S. budget picture and the trade war.
Zawya
a day ago
- Business
- Zawya
Foreign exposure to US assets may be lower than feared: McGeever
(Repeats article that first ran on June 3 with no changes to text) ORLANDO, Florida - It is widely believed that investors around the world have a disproportionately high exposure to U.S. assets, particularly stocks, an imbalance that could roil U.S. markets if corrected. But what if these fears are overblown? Several eye-popping statistics suggest that America's weight in world financial markets is even greater than its outsized economic might. Most strikingly, the U.S. net international investment position (NIIP), or foreign investors' holdings of U.S. assets less U.S. investors' holdings of overseas assets, at the end of 2024 was $26 trillion. That's nearly 24% of global GDP, up from 16% only two years earlier, a surge driven by foreigners' insatiable appetite for U.S. equities, mainly "Big Tech". Demand was so hot that, by some measures, the value of U.S.-listed stocks at the turn of the year represented 74% of total global market cap. That share was 60% six years ago, and less than half in 2011. But the attractiveness of dollar-denominated assets is now being questioned, as the often erratic policies of U.S. President Donald Trump have upset longstanding economic and geopolitical norms, making governments and investors question whether Washington is still a reliable partner on the global stage. The concern is that this eroding confidence triggers a reversal of the massive flows into Wall Street seen in recent years that has damaging spillover effects. Such a correction may not require outright selling. Given the scale of the flows involved, just less buying among foreign investors could be enough to cast a shadow over the world's most important stock market. And the running assumption is foreign investors don't have the capacity or willingness to increase their exposure to U.S. assets, creating a significant long-term downside risk for Wall Street, Treasuries and the dollar. "A structural shift is underway: the slow erosion of US economic dominance," analysts at Deutsche Bank wrote on Monday. SKEPTICAL But looked at another way, foreign exposure to U.S. assets may not be as high as initially meets the eye. That's the view of analysts at JP Morgan, who measure portfolio investment in U.S. bonds and equities as a share of countries' total household sector financial assets. They use a broad definition for a country's "household" sector, covering investments by institutions like insurance companies and pension funds that are ultimately made on behalf of households. Using a broad range of data, from central banks, U.S. Treasury and OECD household financial asset flows, they measure the ratio of U.S. equity and bond holdings relative to household financial assets in each country. They find that "relative to the total financial assets of households in the rest of the world, the allocations to U.S. assets typically stand at around 10-20%." As a result, they are "skeptical of the idea that foreign investors hold too much of U.S. assets." Given that U.S. equities account for more than 70% of the MSCI global market cap and dollar-denominated bonds represent around 50% of global bond indices, according to JP Morgan estimates, the 10-20% exposure of foreign investors to U.S. assets does appear surprisingly low. And the 10-20% figure would be even lower were it not for the outsized U.S. equity holdings at the Swiss National Bank and Norway's sovereign wealth fund. On the bond side, foreigners' footprint in the U.S. Treasury market is shrinking. Data shows that they owned 31% of the $28.55 trillion outstanding Treasury debt at the end of last year. That share has been declining steadily since the Global Financial Crisis. In 2008, the figure was approaching 60%. Overseas investors' share of the T-bill market has shrunk even more. In December, it was under 20%, near its lowest level on record and sharply down from 50% a decade before. Nikolaos Panigirtzoglou and his team at JP Morgan aren't arguing investors will or should ramp up their purchases of U.S. assets. And in cases where allocations are high - such as the Taiwanese exposure to U.S. bonds or Canadians' holdings of U.S. stocks - diversification would hardly be a surprise. But there is "little indication" of broad-based selling of U.S. assets by foreign investors so far this year, they note. And if that selling does materialize, it may be far lighter than many expect. (The opinions expressed here are those of the author, a columnist for Reuters) (By Jamie McGeever) Reuters
Yahoo
6 days ago
- Business
- Yahoo
Foreign investors raise bets that India stock market rally may stall
By Vivek Kumar M and Bharath Rajeswaran (Reuters) -Foreign investors are becoming more cautious about the Indian stock market, indicating a three-month rally may run out of legs despite retail traders growing optimistic, according to monthly derivatives data analysed by two brokerages. The Nifty 50 has risen about 12% from March through May, largely due to better-than-expected corporate earnings and easing global trade risks. That is nearly double the 6.6% gain in the MSCI Emerging Markets index in that time. Foreign portfolio investors (FPIs) pumped $2.66 billion into Indian equities over that period and cut their short positions on the Nifty. A short seller borrows stock at a higher price betting its value will decline, at which point they buy the stock and pocket the profit. However, FPIs have started the June derivatives series -- which runs from May 30 to June 25 -- with about $2 billion in Nifty index futures shorts, the highest since February, according to Nuvama Alternative and Quantitative Research. In contrast, retail investors and high-net-worth individuals (HNIs), called the client category, turned bullish with long positions worth $1.54 billion on Nifty futures, compared with $546 million in shorts from early May. "This divergence sets up a potential tug-of-war between institutional caution and retail optimism, and could lead to a brief pause in the market rally in June," said Abhilash Pagaria, head of Nuvama. Indeed, the Nifty's gains have weakened in each month -- from 6.3% in March to 3.5% in April and to about 2% in May. "Markets appear to be waiting for some concrete cues before turning bullish," said Sriram Velayudhan, VP at IIFL Securities. Velayudhan expects the Nifty 50 to trade between 24,300 and 25,300 points over the June series, compared with its current level of about 24,800 points. Analysts expect the Nifty to hit new highs by end-2025, but say a correction is likely in the next three months, according to a Reuters poll. Sign in to access your portfolio
Reuters
23-05-2025
- Business
- Reuters
Rupee gains along with Asian peers as US fiscal concerns drag dollar
MUMBAI, May 23 (Reuters) - The Indian rupee gained on Friday as the dollar slipped on concerns about the U.S. fiscal outlook, with markets digesting the potential impact of President Donald Trump's tax-cut bill, which is projected to add to the U.S. debt pile. Emerging market currencies rose across the board, with Asian currencies up between 0.1% to 0.7%. The rupee rose 0.2% to 85.83 as of 10:25 a.m. IST on Friday, recovering after slipping past the 86/dollar level for the first time in over a month on Thursday. The South Asian currency has broadly underperformed its emerging market peers so far in May, with traders citing persistent dollar demand from corporate payments and foreign portfolio outflows. Foreign portfolio investors sold Indian shares worth about $586 million on Thursday, as per provisional data, the third such session of selling in four days. Overseas investors were also net sellers of index-linked Indian bonds on Thursday. The rupee was aided by dollar offers from local private and a few foreign banks early on Friday but could face resistance around the 85.75 level while finding support near 86.20, a foreign exchange trader at a mid-sized Mumbai bank said. The dollar index, meanwhile, was down 0.2% at 99.6 while U.S. bond yields edged lower in Asia trading. The 10-year U.S. Treasury yield had climbed to a three-month peak of 4.62% as a worsening fiscal outlook for the United States raised concerns about demand for U.S. government debt. While India's sovereign bonds have witnessed some selling pressure due to the rise in U.S. bond yields, expectations of monetary policy easing have contained the pressure. Announcement of the central bank's dividend transfer to the government will be in focus on Friday. The Reserve Bank of India's earnings for the previous fiscal "are likely to have a received a hand from a significant increase in FX dollar sales to the tune of ~$400 billion, which is more than double of FY24, in addition to higher interest income from government securities," DBS said in a note.
