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Business Standard
31-07-2025
- Business
- Business Standard
Trump's tariffs threaten to deepen India's $248 bn stock market rout
India's faltering equities market faces the risk of more losses after the nation was slapped with one of the highest tariff rates in Asia on its exports to the US. President Donald Trump said he would impose a 25 per cent levy on Indian goods starting Friday and threatened an additional penalty over the country's energy purchases from Russia. That's a steeper hit than the 15 per cent to 20 per cent range applied on several regional peers. India's stock benchmark has lagged most major global peers this year amid concerns over a slowdown in its economy and corporate earnings. The underperformance has deepened this month as foreign investors have accelerated their withdrawals, turning attention to cheaper or more attractive markets like Hong Kong and South Korea. The value of India's stock market is down $248 billion since reaching a record on July 2. 'India is known to be a tough negotiator when it comes to trade, and this time the toughness seems to have effected an undesirable outcome,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'The 25 per cent tariff should have a moderate negative impact on India's stock market, especially for export sector stocks.' The MSCI India Index is on track for its weakest month since February. While it has eked out a gain this year, its performance trails the almost 14 per cent jump in MSCI Asia Pacific Index and pales in comparison to the 36 per cent surge in the MSCI Korea Index, which has rallied on optimism surrounding bold reforms under a new president. Futures contracts on the local benchmark NSE Nifty 50 Index dropped 0.6 per cent after Trump's announcement while the iShares MSCI India ETF slid 1.5 per cent. The situation remains fluid, as the US president later said negotiations with India continue and whether or not a trade deal can be reached will be known 'at this end of this week.' India's once-lauded relative insulation from global turmoil is losing its shine. With earnings offering few positive surprises and valuations remaining among the highest in the region, investors are likely to stay cautious in the near term. The MSCI India trades at almost 22 times its one-year forward earnings, well above its long-term average and gauges of Chinese and Korean shares. Even as stocks decline, India's equity capital market is humming. Fundraising from initial public offerings, share placements to large investors and block trades has topped $6 billion for a third straight month. That level of issuance — last seen in late 2024 — coincided with a double-digit correction in local shares. 'High valuations and slowing profits are inverting buyer-seller incentives,' said Prateek Parekh, a strategist with Nuvama Institutional Equities. Business founders and private equity investors are on a 'selling spree,' while domestic flows are slowing. 'Foreign fund flows are now critical.' That boost will be key, as foreign investors — who have withdrawn more than $2 billion from local shares this month — weigh whether earnings can justify the rich valuations. The April-June results season so far has done little to ease concerns. Earnings from key technology and financial firms, the two sectors that together make up about 40 per cent of the market's value, have largely underwhelmed. Yet some believe the tide could still turn. Interest-rate cuts and a pick-up in economic growth could end the 'flat-to-weak' positioning of local stocks and lay the foundation for an earnings rebound in the second half of the year through March, according to Emkay Global Financial Services' strategist Seshadri Sen. Rahul Chadha, founder and chief investment officer at New York-based Shikhara Investment Management LP. Chadha, said his fund has raised exposure to Korean stocks in recent months due to benefits including improved corporate governance. 'Honestly, 2025 looks challenging for India to close the performance gap,' he added.
Time of India
31-07-2025
- Business
- Time of India
Trump's tariffs threaten to deepen $248 billion India stock rout
India's faltering equities market faces the risk of more losses after the nation was slapped with one of the highest tariff rates in Asia on its exports to the US. President Donald Trump said he would impose a 25% levy on Indian goods starting Friday and threatened an additional penalty over the country's energy purchases from Russia. That's a steeper hit than the 15% to 20% range applied on several regional peers. Explore courses from Top Institutes in Please select course: Select a Course Category MBA Product Management Artificial Intelligence others Management Digital Marketing Data Analytics Degree Finance Design Thinking MCA Cybersecurity CXO Project Management Healthcare Data Science Technology Data Science Leadership Operations Management PGDM Public Policy healthcare Others Skills you'll gain: Financial Management Team Leadership & Collaboration Financial Reporting & Analysis Advocacy Strategies for Leadership Duration: 18 Months UMass Global Master of Business Administration (MBA) Starts on May 13, 2024 Get Details Skills you'll gain: Analytical Skills Financial Literacy Leadership and Management Skills Strategic Thinking Duration: 24 Months Vellore Institute of Technology VIT Online MBA Starts on Aug 14, 2024 Get Details India's stock benchmark has lagged most major global peers this year amid concerns over a slowdown in its economy and corporate earnings. The underperformance has deepened this month as foreign investors have accelerated their withdrawals, turning attention to cheaper or more attractive markets like Hong Kong and South Korea. The value of India's stock market is down $248 billion since reaching a record on July 2. 'India is known to be a tough negotiator when it comes to trade, and this time the toughness seems to have affected an undesirable outcome,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'The 25% tariff should have a moderate negative impact on India's stock market, especially for export sector stocks.' The MSCI India Index is on track for its weakest month since February. While it has eked out a gain this year, its performance trails the almost 14% jump in MSCI Asia Pacific Index and pales in comparison to the 36% surge in the MSCI Korea Index, which has rallied on optimism surrounding bold reforms under a new president. Live Events Bloomberg Futures contracts on the local benchmark NSE Nifty 50 Index dropped 0.6% after Trump's announcement while the iShares MSCI India ETF slid 1.5%. The situation remains fluid, as the US president later said negotiations with India continue and whether or not a trade deal can be reached will be known 'at this end of this week.' India's once-lauded relative insulation from global turmoil is losing its shine. With earnings offering few positive surprises and valuations remaining among the highest in the region, investors are likely to stay cautious in the near term. The MSCI India trades at almost 22 times its one-year forward earnings, well above its long-term average and gauges of Chinese and Korean shares. Even as stocks decline, India's equity capital market is humming. Fundraising from initial public offerings, share placements to large investors and block trades has topped $6 billion for a third straight month. That level of issuance — last seen in late 2024 — coincided with a double-digit correction in local shares. Also read: How will Trump's tariff announcement impact Indian stock market? 'High valuations and slowing profits are inverting buyer-seller incentives,' said Prateek Parekh, a strategist with Nuvama Institutional Equities. Business founders and private equity investors are on a 'selling spree,' while domestic flows are slowing. 'Foreign fund flows are now critical.' That boost will be key, as foreign investors — who have withdrawn more than $2 billion from local shares this month — weigh whether earnings can justify the rich valuations. The April-June results season so far has done little to ease concerns. Earnings from key technology and financial firms, the two sectors that together make up about 40% of the market's value, have largely underwhelmed. Yet some believe the tide could still turn. Interest-rate cuts and a pick-up in economic growth could end the 'flat-to-weak' positioning of local stocks and lay the foundation for an earnings rebound in the second half of the year through March, according to Emkay Global Financial Services ' strategist Seshadri Sen. Rahul Chadha, founder and chief investment officer at New York-based Shikhara Investment Management LP. Chadha, said his fund has raised exposure to Korean stocks in recent months due to benefits including improved corporate governance. 'Honestly, 2025 looks challenging for India to close the performance gap,' he added. ETMarkets WhatsApp channel )
Yahoo
27-06-2025
- Business
- Yahoo
Asian Markets in Full Swing as Investors Shake Off Trade Jitters
(Bloomberg) -- Trading desks across Asia are buzzing with excitement again, as the region shakes off tariff shocks and attracts investors with its solid growth prospects. US Renters Face Storm of Rising Costs Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Mapping the Architectural History of New York's Chinatown US State Budget Wounds Intensify From Trump, DOGE Policy Shifts From stocks to currencies to credit, the rebound from the depths of the April market turmoil has been impressive. MSCI's Asia equities index has jumped 25% to a four-year high, while a slump in the dollar has powered a regional currency gauge to the strongest since October. Companies are rushing to raise money to capitalize on the market's reawakening. It marks a sharp reversal from the jitters that prevailed just a couple of months ago, when fears of a full-blown trade war and concerns that runaway inflation will limit central banks' policy room weighed heavily on Asian assets. Instead, a weakening dollar has created space for interest-rate cuts across the region, with the Federal Reserve's widely-expected easing likely to provide additional tailwinds. 'Stocks have bounced back strongly from their April bottom, and investors are realizing they might have been too pessimistic about Trump's tariffs,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'Investors are realizing they might have been too pessimistic about tariffs,' he said. 'Trump is showing more flexibility around his trade policies, and that's driving optimism.' Take the demand for blockbuster share sales from Hong Kong to Tokyo as an example of the palpable excitement. So far, such deals across the region including initial public offerings have raised more than $90 billion, a 25% jump from this time last year, data compiled by Bloomberg show. While Hong Kong has dominated larger deals, Japan's capital market has also hummed along with this week, seeing the highest IPO volume since mid-March. Debt capital markets have also roared back to life after a dearth of deals at the height of volatility. Yield premiums on Asian investment-grade dollar bonds have come down from an April high of over 100 basis points to near 76 basis points, not far off a record low reached in February, a Bloomberg index shows. The tightening of Asian spreads is all the more impressive given a surge in dollar bond sales from the region, with this week seeing the largest volume of deals since March. Asia Pacific offerings in the US currency have climbed by about 45% this year to more than $200 billion. To be sure, the recent rebound has been global, as markets around the world enjoyed a relief rally. US stocks have also regained their mojo as the 'sell America' trade lost steam. The Nasdaq 100 is at a fresh record and the S&P 500 is just shy of its February peak. Asian markets may face fresh volatility in the coming weeks. US Commerce Secretary Howard Lutnick told Bloomberg Television that President Donald Trump was prepared to finalize a slate of trade deals in connection with a July 9 deadline to reinstate higher tariffs he paused in April. 'Given what we've been through in the last few months, I can't help but think that there are a few more twists to come,' said Nick Twidale, chief analyst at AT Global Markets in Sydney. 'The trade news is the most important factor for Asian markets.' Despite the looming uncertainties, the extent of resurgence in Asia's export-reliant economies speaks to the region's resilience. A softer dollar has bolstered the case for owning Asian assets. A Bloomberg dollar index is set for a sixth straight month of losses, the worst streak since 2017. Asian sovereign bonds have enjoyed a surge in inflows as investors looked to diversify and the region's central banks embarked on interest-rate cuts. South Korea has especially stood out, receiving over $40 billion so far in 2025, according to Bloomberg-compiled data. Local factors such as the removal of political uncertainty following the election of a new president have helped. 'When I think about allocating to Asia, I think about the balance and defensiveness that it offers to the portfolio,' said Leonard Kwan, portfolio manager for T. Rowe Price in Hong Kong. 'It's a region that has got better fiscal and external positioning for the countries.' --With assistance from Finbarr Flynn, Malavika Kaur Makol and Yasutaka Tamura. (Updates with latest on trade deals in 10th paragraph, new comment in 11th.) How to Steal a House America's Top Consumer-Sentiment Economist Is Worried Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P.
Yahoo
26-06-2025
- Business
- Yahoo
Asian Markets in Full Swing as Investors Shake Off Trade Jitters
(Bloomberg) -- Trading desks across Asia are buzzing with excitement again, as the region shakes off tariff shocks and attracts investors with its solid growth prospects. US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags Mapping the Architectural History of New York's Chinatown From stocks to currencies to credit, the rebound from the depths of the April market turmoil has been impressive. MSCI's Asia equities index has jumped 25% to a four-year high, while a slump in the dollar has powered a regional currency gauge to the strongest since October. Companies are rushing to raise money to capitalize on the market's reawakening. It marks a sharp reversal from the jitters that prevailed just a couple of months ago, when fears of a full-blown trade war and concerns that runaway inflation will limit central banks' policy room weighed heavily on Asian assets. Instead, a weakening dollar has created space for interest-rate cuts across the region, with the Federal Reserve's widely-expected easing likely to provide additional tailwinds. 'Stocks have bounced back strongly from their April bottom, and investors are realizing they might have been too pessimistic about Trump's tariffs,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'Trump is showing more flexibility around his trade policies, and that's driving optimism.' Take the demand for blockbuster share sales from Hong Kong to Tokyo as an example of the palpable excitement. So far, such deals across the region including initial public offerings have raised more than $90 billion, a 25% jump from this time last year, data compiled by Bloomberg show. While Hong Kong has dominated larger deals, Japan's capital market has also hummed along with this week, seeing the highest IPO volume since mid-March. Debt capital markets have also roared back to life after a dearth of deals at the height of volatility. Yield premiums on Asian investment-grade dollar bonds have narrowed to about 75 basis points, edging closer to a record low reached in February, a Bloomberg index shows. The tightening of Asian spreads is all the more impressive given a surge in dollar bond sales from the region, with this week seeing the largest volume of deals since March. Asia Pacific offerings in the US currency have climbed by about 47% this year to $197 billion, and the total is set to rise on Thursday after several issuers price notes. To be sure, the recent rebound has been global, as markets around the world enjoyed a relief rally to varying degrees. US stocks have also regained their mojo as the 'sell America' trade lost steam. The Nasdaq 100 is at a fresh record and the S&P 500 is nearing its February peak. The extent of resurgence in Asia is nonetheless notable, given that the export-reliant region was among the hardest hit by President Donald Trump's tariffs. A softer dollar has bolstered the case for owning Asian assets. A Bloomberg dollar index is set for a sixth straight month of losses, the worst streak since 2017. Asian sovereign bonds have enjoyed a surge in inflows as investors looked to diversify and the region's central banks embarked on interest-rate cuts. South Korea has especially stood out, receiving over $39 billion so far in 2025, according to Bloomberg-compiled data. Local factors such as the removal of political uncertainty following the election of a new president have helped. 'When I think about allocating to Asia, I think about the balance and defensiveness that it offers to the portfolio,' said Leonard Kwan, portfolio manager for T. Rowe Price in Hong Kong. 'It's a region that has got better fiscal and external positioning for the countries.' --With assistance from Finbarr Flynn, Malavika Kaur Makol and Yasutaka Tamura. Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push How to Steal a House Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros ©2025 Bloomberg L.P. Sign in to access your portfolio
Business Times
26-06-2025
- Business
- Business Times
Asian markets in full swing as investors shake off trade jitters
[HONG KONG] Trading desks across Asia are buzzing with excitement again, as the region shakes off tariff shocks and attracts investors with its solid growth prospects. From stocks to currencies to credit, the rebound from the depths of the April market turmoil has been impressive. MSCI's Asia equities index has jumped 25 per cent to a four-year high, while a slump in the US dollar has powered a regional currency gauge to the strongest since October. Companies are rushing to raise money to capitalise on the market's reawakening. It marks a sharp reversal from the jitters that prevailed just a couple of months ago, when fears of a full-blown trade war and concerns that runaway inflation will limit central banks' policy room weighed heavily on Asian assets. Instead, a weakening US dollar has created space for interest-rate cuts across the region, with the Federal Reserve's widely-expected easing likely to provide additional tailwinds. 'Stocks have bounced back strongly from their April bottom, and investors are realising they might have been too pessimistic about Trump's tariffs,' said Tomo Kinoshita, global market strategist at Invesco Asset Management. 'Trump is showing more flexibility around his trade policies, and that's driving optimism.' Take the demand for blockbuster share sales from Hong Kong to Tokyo as an example of the palpable excitement. So far, such deals across the region including initial public offerings have raised more than US$90 billion, a 25 per cent jump from this time last year, data compiled by Bloomberg show. While Hong Kong has dominated larger deals, Japan's capital market has also hummed along with this week, seeing the highest IPO volume since mid-March. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Debt capital markets have also roared back to life after a dearth of deals at the height of volatility. Yield premiums on Asian investment-grade US dollar bonds have narrowed to about 75 basis points, edging closer to a record low reached in February, a Bloomberg index shows. The tightening of Asian spreads is all the more impressive given a surge in US dollar bond sales from the region, with this week seeing the largest volume of deals since March. Asia-Pacific offerings in the US currency have climbed by about 47 per cent this year to US$197 billion, and the total is set to rise on Thursday after several issuers price notes. To be sure, the recent rebound has been global, as markets around the world enjoyed a relief rally to varying degrees. US stocks have also regained their mojo as the 'sell America' trade lost steam. The Nasdaq 100 is at a fresh record and the S&P 500 is nearing its February peak. The extent of resurgence in Asia is nonetheless notable, given that the export-reliant region was among the hardest hit by US President Donald Trump's tariffs. A softer US dollar has bolstered the case for owning Asian assets. A Bloomberg US dollar index is set for a sixth straight month of losses, the worst streak since 2017. Asian sovereign bonds have enjoyed a surge in inflows as investors looked to diversify and the region's central banks embarked on interest-rate cuts. South Korea has especially stood out, receiving over US$39 billion so far in 2025, according to Bloomberg-compiled data. Local factors such as the removal of political uncertainty following the election of a new president have helped. 'When I think about allocating to Asia, I think about the balance and defensiveness that it offers to the portfolio,' said Leonard Kwan, portfolio manager for T Rowe Price in Hong Kong. 'It's a region that has got better fiscal and external positioning for the countries.' BLOOMBERG
