Modi Rebuts Analysts Who Doubt India’s World-Beating Growth

  • a couple of years ago
  • / By Amit

Week 14, 2016

Indian economyIndian Prime Minister Narendra Modi offered a wide-ranging rebuttal to critics who say he’s gotten lucky with low oil prices.

Loan growth has picked up, corporate rating upgrades are now outpacing downgrades, foreign direct investment hit a record last year and some key manufacturing sectors such as carmakers are growing rapidly, Modi said at an event organized by Bloomberg LP in New Delhi on Monday. The focus is now on clean energy, farm incomes and creating jobs, he said.

“Obviously there are some who find that difficult to digest and come up with imaginative and fanciful ideas to belittle that achievement,” Modi said. “The fact is that India’s economic success is the hard-won result of prudence, sound policy and effective management.”

Nearly two years since a landslide election win, Modi is battling criticism that India’s 7.6 percent annual expansion is thanks to crashing global oil costs, which help shrink deficits and curb inflation in the $2 trillion economy. He’s also trying to strike a balance between pleasing investors who want faster economic reforms and winning rural votes before this year’s state elections.

What’s Happening in the Markets this week

  • Sustainability of Emerging-Market Rally Eyed in U.S., China Data. Emerging-market currencies headed for the best quarterly gain in four years and stocks are set for the biggest three-month advance since June 2014 as inflows return amid a more conservative Federal Reserve.
  • U.S. Stocks Little Changed as Investors Sift for Clues on Rates. U.S. stocks were little changed in light trading, following their first weekly decline in six, as investors assessed economic data for clues on the course for interest rates. The Standard & Poor’s 500 Index increased for the first time in four days.

Commodities in Review

  • Oil Drops a 4th Day as U.S. Crude Stockpiles Seen Expanding Glut. Oil declined for a fourth day before weekly U.S. government data forecast to show increasing crude stockpiles kept supplies at the highest level in more than eight decades.
  • Barclays Warns Commodities May Slump on a `Rush for the Exits’. Commodities including oil and copper are at risk of steep declines as recent advances aren’t fully grounded in improved fundamentals, according to Barclays Plc, which warned that prices may tumble as investors rush for the exits.

USA

  • Dollar Advances Before Yellen’s Speech and Confidence Report. A gauge of the dollar advanced, paring its biggest one-day decline in more than a week, as the market awaits Federal Reserve Chair Janet Yellen’s speech that may provide further clarity about her assessment of the economy.
  • The U.S currency gained versus most of its 16 major peers before a report on Tuesday which economists forecast will show consumer confidence improved in March.

UK

  • Easyjet Leads Britain’s Stock Advances After Week of Declines. U.K. shares are rebounding after posting their biggest weekly loss in more than a month. EasyJet Plc rose 3% after Bank of America Corp. recommended buying the shares, citing an attractive valuation.
  • Financial firms RSA Insurance Group Plc, Prudential Plc and Barclays Plc gained more than 2%. The moves pushed the FTSE 100 Index up 0.7% at 8:19 a.m. in London.

Europe

  • Europe Stocks Rise for First Time in Five Days as Markets Reopen. European stocks advanced, snapping their longest losing streak in a month, as markets reopened after the Easter holiday. The Stoxx Europe 600 Index climbed 0.8% at 8:12 a.m. in London, as all industry groups rose.
  • The benchmark fell for four days through Thursday amid slides in banks and resource-related shares, signaling a loss of momentum in the rebound that more than halved its 2016 decline.

Asia

  • Asia Stocks Fall as Japan Goes Ex-Dividend, China Shares Slide. Asian stocks fell on low volumes as health-care companies led losses and more than two-thirds of the companies in Japan’s Topix index traded without the right to the next dividend. The MSCI Asia Pacific Index slipped 0.5 percent to 127.49 as of 5:01 p.m. in Tokyo.

Emerging Markets

  • Emerging-Market Assets Advance as Brazilian Stocks Rally. Gains in Brazilian stocks and currencies led emerging markets higher as investors’ optimism on a possible change in the nation’s government outweighed concern that the U.S. is inching closer to an interest-rate hike.
  • The MSCI Emerging Markets Index rose 0.1 percent to close at 813.04, the best month in four years with a 9.9 percent increase since Feb. 29.

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About the Author Amit

Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide. He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’. He helps business owners and professionals ‘Create A Second Income’ through investments.

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