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Economic Times
23-04-2025
- Business
- Economic Times
India emerges as Trump-proof safe haven as emerging markets rebound
India's domestic focus shields it from global trade uncertainty Live Events Manufacturing growth signals confidence Sector focus: Banks, Consumption, and Healthcare stand out India's valuation reset sparks renewed interest (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel India is emerging as a relatively Trump-proof haven amid the broader rebound in emerging market sentiment. According to Herald Van Der Linde, HSBC's Head of Asia Pacific Equity Strategy, the country's strong domestic focus and more attractive valuations are rekindling investor market investor sentiment improved on Wednesday as Asian equities rose and regional currencies softened against a firmer U.S. dollar, following remarks from U.S. President Donald Trump that eased concerns over Federal Reserve independence and future China to Van Der Linde, interest in emerging markets had begun to revive even before the latest geopolitical developments. 'The growth outlook was starting to get better... particularly in China and some others, while India was a bit of an outlier,' he said in an interview with ET Now. However, with tariffs and policy uncertainty reshaping the global investment landscape, markets with strong domestic drivers are gaining Der Linde explained that India's relatively insulated position in the current geopolitical environment makes it a more attractive investment destination. "If you are a market that is largely domestically oriented, not so much exposed to trade, and... where valuations look more reasonable than a year ago, these start to look interesting," he said. Unlike other Asian economies such as South Korea, Taiwan, and Japan, which are heavily reliant on exports to the U.S., India's economy is driven more by domestic consumption and global growth slowing down due to trade tensions, India's economy remains structurally sound. "Growth is slowing, but still the feeling is that structurally growth in India over the next couple of years should be okay,' Van Der Linde said. 'Earnings growth somewhere between 10% to 15%... in the current kind of global environment that does not look too bad.' This outlook is significantly more favourable than that for export-dependent markets, where the impact of tariffs has been more strong domestic story is further supported by robust economic data. The country's private sector showed robust growth in April, driven by strong demand, particularly from international markets, which further underscores the nation's domestic resilience. The HSBC flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 60.0 in April, up from 59.5 in March. This marked the strongest pace of combined manufacturing and services growth since August, Reuters growth played a central role in the strong performance, with the index rising to 58.4 from 58.1, reaching its highest level in a year. Meanwhile, the services PMI index also showed positive momentum, climbing to a four-month high of 59.1 from 58.5 in March. The growth outlook for India continues to be positive, with strong demand from both domestic and international markets, Van Der Linde to sectors of interest within India, Van Der Linde highlighted that large liquid sectors with reasonable valuations are attracting foreign investor attention. 'The sectors that we talk about with mostly foreign investors are to a large extent large liquid sectors where valuations are reasonable,' he said. Specifically, private banks, as well as sectors with growth stories insulated from macroeconomic swings, are particularly appealing.'Think about, for example, rising consumption or demand for medical and healthcare in India, such as hospitals,' Van Der Linde said. The shift toward consumption-driven growth is one of the key factors that differentiate India from other emerging markets where export-driven sectors read | Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? HSBC's cautious stance on India in the past year has shifted, with Van Der Linde noting that market conditions now look more balanced. "Valuations are lower, and the realisation that earnings growth is not going to be as fantastic as it was over the last couple of years is now well priced into the market," he said. With some policy support potentially on the horizon, India's equity market looks increasingly attractive to investors seeking stability amidst global Van Der Linde emphasised that the broader market environment remains volatile. The uncertainty stemming from U.S. trade policies and other global factors continues to create challenges for businesses trying to make investment decisions. "It's that uncertainty to investments primarily by firms that is really leading to a sort of dislocation in markets," he noted.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
23-04-2025
- Business
- Economic Times
India April business growth hits 8-month high as export orders surge, PMI shows
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's private sector growth rose to an eight-month high in April fueled by robust demand, particularly a surge in foreign orders for manufactured goods, according to a survey, but business confidence showed some signs of the latest data underscores a vibrant start to the fiscal year for India's economy, the souring outlook will make it challenging to maintain momentum at a time when U.S. President Donald Trump's tariffs have hurt business HSBC flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 60.0, up from 59.5 in March, the strongest pace of combined manufacturing and services growth since 50-mark separates growth from growth underpinned the strong performance, with the index rising to 58.4 from 58.1 and reaching a level not seen in a year. The services PMI index also showed solid growth, rising to a four-month high of 59.1 from 58.5 last new business in the services sector and an improvement in goods production and new orders - a key gauge for demand - especially from international clients, were the primary drivers of the overall positive momentum."New export orders accelerated sharply, likely buoyed by the 90-day pause in the implementation of tariffs," said Pranjul Bhandari, chief India economist at HSBC referring to Trump's decision to target dozens of countries on April 2 by announcing sweeping tariffs on goods before deferring them for 90 is trying to position itself as a manufacturing base of choice for the world as China faces high U.S. record surge in new export business, the strongest since the index was measured in September 2014, was heavily concentrated within the manufacturing sector which registered the most significant increase in over 15 years."As a result, output and employment grew, for both, manufacturers and service providers," Bhandari an intensification of capacity pressures, firms continued to hire additional staff across sectors with goods producers recording the highest employment generation since the beginning of the survey in March input cost inflation trends were mixed, accelerating in the manufacturing sector and decelerating in their services counterpart compared to March, robust demand allowed firms to pass higher costs on to prices saw a sharper increase led by sentiment was also mixed with strong order inflows improving optimism among goods producers, but softening in the services sector resulting in an eight-month low overall outlook for the coming year.
