The stock market is surging ahead of Prime Minister Narendra Modi\u2019s visit to the US but would it be able to sustain the level amid series of steps of US Fed and involvement of Goldman Sachs in SVB crash, said to be worse since 1930s Great Depression.
The stocks could be led by domestic factors or tumble on the US moves. The Fed plans two more interest rate raises and the market is predicted to crash even if it is in a bull phase. The S&P 500 entered a technical bull market last week, but the sizable rally that led it there may not last for long, according to Bank of America chief investment strategist, Michael Hartnett, who is credited to have correctly predicted last year\u2019s (2022) sell-off, warned in a June 16 analysis that the stock market could resume its downward spiral soon. \u201cWe are not convinced we at start of brand, new shiny bull market,\u201d Hartnett wrote. \u201cStill feels more like combo of 2000 or 2008, big rally before big collapse.\u201d
India has hopes in Prime Minister Modi-President Joe Biden summit. Biden at the recent Hiroshima G7 meet expressed his desires to see Modi at the dinner in Washington. Removing barriers to technological trade between India and the US and India is a key part of Modi\u2019s coming state visit, US National Security Adviser Jake Sullivan says. The deal would also mark a win for Prime Minister Narendra Modi\u2019s ambitious \u201cMake in India\u201d plans, while offering Washington an opportunity to strengthen key supply chains outside of China. Indian industry perceives this as a great opportunity for getting orders for them US companies. The US only sees it in terms of reducing reliance on China by giving crumbs to India so that it is placated at a crucial time of Russia-Ukraine war. Its India investment hovers around $ 20 billion a year. India looks at the Washington meet to have it raised.
India\u2019s key deal is likely to be with Micron Technology, which is to commit $ 1 billion for a semiconductor packaging factory in India. As earlier told it will not an assembly facility. It will develop as export hub and give boost to Micron, which faces ban on its Chinese made chips. Indiawill discuss measures to deepen economic and trade relations and strengthen partnership in defence, space and clean energy, besides reinforcing their commitment to a free, prosperous and secure Indo-Pacific. The minor rupee gains by 30 paise is not a great indicator. But turmoil in the US can send the Indian market on a roll. The 30-share BSE index zoomed 466.95 points to settle at a record closing high of 63,384.58. During the day, it rallied 602.73 points to 63,520.36 on June 16, 2023. The index scaled its earlier lifetime high of 63,284.19 on December 1 last year. The NSE Nifty climbed 137.90 points to end at its lifetime peak of 18,826. Its previous record peak was 18,812.50. In short, it regains and not a real growth. The Securities and Exchange Commission (SEC) and Federal Reserve are reportedly seeking documents into Goldman Sachs\u2019 role in purchasing $21 billion of SVB\u2019s securities portfolio as the hamstrung regional bank was looking to shore up cash and find a potential buyer, as well as Goldman\u2019s role in allegedly advising SVB in raising capital, sources told the. Federal investigators will also probe whether Goldman\u2019s trading and banking divisions were improperly communicating, and whether the banking behemoth advised SVB to sell its portfolio\u2014SVB executives reportedly decided to sell its securities to Goldman without seeking other buyers out of fear of market repercussions. This has led to credibility loss of rating agencies. The US Financial Industry Regulatory Authority, or Finra, hit Goldman Sachs with a $3 million fine for mixing up 60 million stock orders between October 2015 and April 2018.
The US corrections might make the foreign portfolio investors move back to the US, as rates are to be revised over 6 percent. This could mean once again a loss to the Nifty and Sensex.
Indians have lost the maximum jobs in the US as Meta-Facebook, Google, Microsoft and Dell and other tech companies cut 84000 jobs. It has hit remittances from the US. Though now the US is again relaxing visa rules but it would be sometime to make up the losses. India receives $ 111 billion, the highest remittances. It is estimated that remittances to be around $ 656 billion due to slowing economic growth across major sources.
The stock market rebound remains glued mostly to FPI investments. As they invest, indices move up and with withdrawal again plunges. The FPI purchases are at Rs 72,670 crore and domestic institutions (DII)bought a mere Rs 3240 crore since January this year. Thus the market is lopsided and is susceptible to uncertainties. The DII are cautious and making virtual token investments. This is also an indicator of slow growth of domestic industries, manufacturing included. India has to seek open access to the US market for its goods, including farm produces. India exports to the US leather items, medical appliances and accessories, frozen meat, textiles, gems , machinery and some agricultural products. The basket needs to be widened.
India imports 93 items worth $ 51.77 billion from the US and exports are worth around $ 80 billion. How India can have a preferential market there would be of interest to watch.
In this scenario, surge for the gold remains a big issue. If the US Fed make any changes it boosts the demand for gold. Once that happens, various investments made in India get affected.
If Hartnett\u2019s predictions come true, it means the American economy in real terms is not recovering. May be it is soft towards India for this reason. It needs various strategic and logistic support from India to counter move in Ukraine. The global slowdown it finds difficult to make up. Not all its European allies are happy with the war. TIt has not helped Ukraine much. But its friends like India has are hit more than one way. Indian petroleum companies find their earnings locked up due to blockade of banking network SWIFT.
While Modi visit is significant, the gains would be moderate for now. Once the war comes to an end, the relationships could benefit both countries. That may no be soon.<\/p>\n","protected":false},"excerpt":{"rendered":"
The stock market is surging ahead of Prime Minister Narendra Modi\u2019s visit to the US but would it be able to sustain the level amid series of steps of US Fed and involvement of Goldman Sachs in SVB crash, said to be worse since 1930s Great Depression.The stocks could be led by domestic factors or […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[397,395],"tags":[],"class_list":["post-356681","post","type-post","status-publish","format-standard","category-columnist","category-opinion"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/356681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=356681"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/356681\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=356681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=356681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=356681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}