Topic 3: MARKET SNIPPETS

India overtakes the UK to become the 5th largest economy in the world
Top 10 Economies, Nominal GDP ($ mn)

Moody’s affirms stable outlook for India
Moody’s retained India’s sovereign credit rating at Baa3 with a stable outlook citing that India’s credit profile reflects high growth potential, strong external position, and a stable domestic financing base for government debt. Also, the rating agency does not expect global challenges including the impact of the Russia-Ukraine conflict, higher inflation, and tightening global financial conditions to derail India’s economic recovery from the pandemic.

Moody’s highlighted that India could see a rating upgrade if the growth potential increases materially beyond their expectations, supported by effective policy implementations that could lead to a significant and sustained pickup in private sector investment. However, factors like weaker economic growth or a resurgence of financial sector risk could put downward pressure on the ratings.

JP Morgan likely to include India in its emerging market bond index
Indian bonds are poised to rally as JPMorgan is likely to include India in its widely tracked emerging-market bond index, setting the stage for billions of dollars of inflows. The index team has more incentive to include India on the back of Russia’s exclusion and most investors either support or have no objection. However, the timeline for the announcement of inclusion is yet unknown. The massive inflow over the next one-year will support the G-sec bond yields and help strengthen INR

ECB hikes interest rate by another 75 bps
After raising interest rates for the first time in over a decade at their last meeting, European Central Bank (ECB) policymakers deliver another bumper hike to fight against soaring inflation. The ECB is catching up as far as rate hikes are concerned, and this hike sends a clear message about ECB’s intention to tame inflation.

Steep increases in energy prices in the wake of the Russian invasion of Ukraine have heaped pressure on households and sent Eurozone inflation to new highs. The recent halt of gas deliveries to Europe via the Nord Stream 1 pipeline has not only pushed stocks lower and increased the risk of a recession in Europe, but it has also pushed bond yields higher.

The Eurozone is almost certainly entering a recession, with recent surveys showing a deepening cost of living crisis and a gloomy outlook that is keeping consumers wary of spending. Also, some of the energy-intensive industries in Europe have already scaled back production.



Top | Back
The information contained herein (the “Information”) may not be reproduced or disseminated in whole or in part without prior written permission from the Company. The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared based on publicly available information, internally developed data and other sources believed to be reliable. The directors, employees, affiliates or representatives (“Entities & their affiliates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy, reliability and is not responsible for any errors or omissions or for the results obtained from the use of such information. Readers are advised to rely on their own analysis, interpretations & investigations. Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements including those relating to general business plans and strategy, future financial condition and growth prospects, and future developments in industries and competitive and regulatory environments. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, they do involve several assumptions, risks, and uncertainties. Readers are also advised to seek independent professional advice to arrive at an informed investment decision. Entities & their affiliates including persons involved in the preparation or issuance of this document shall not be liable in any way for direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of the lost profits arising from the information contained in this material. Readers alone shall be fully responsible for any decision taken based on this document.
Copyright © 2022 Fintso