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Also in today’s edition: Sops vs. Modi; West Asian war levels up
Good morning! The Indian Railways plans to sniff out stinky loos. Literally. It won’t be staff but technology that will do the foul-smelling job. The Economic Times reports that a Mumbai-based startup has been shortlisted for its odour-monitoring tech. The Railways is planning a pilot on the new Vande Bharat sleeper trains. It will then use specialty chemicals to kill the odour-producing bacteria. All because some passengers forget to flush.
🎧 Richard Booth, head of APAC at BioCatch, on financial scams in India and the role of mule accounts. Also in today’s episode: Swiggy’s pet perks vs. gig gaps. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.
The Market Signal*
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Stocks & Economy: Economists The Wall Street Journal surveyed are now more or less convinced that the US economy will not slip into a recession. They believe it can live, thrive even, with elevated interest rates.
The escalation of the conflict in West Asia is expected to drive up gold and crude oil prices. The high prices of another commodity-–coffee–is, however, making Indian growers happy. Robusta bean prices shot past Rs 10,000 for 50 kg bags, delivering a windfall to farmers concentrated largely in Karnataka.
While on commodities, the conflict escalation is worrying basmati rice and tea exporters. Iran is a big buyer of both items from India.
Asian markets opened in the red as uncertainty clouded the mood. The GIFT Nifty indicates a flat or subdued opening for Indian equities too.
INVESTING
Dancing Elephant In The Year Of The Dragon
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The valuation difference between India and China has created a juicy international investment play. Momentum indicators have shifted towards China, but India remains a hot favourite.
“It’s a very strategic play,” technical analyst Damanick Dantes, who owns global strategy firm Dantes Outlook, told The Core. “Short-term momentum indicators have shifted negatively on India versus China.
While China is pulling out all stops to deploy resources for rapid advancement in technologies, President Xi Jinping’s “common prosperity” doctrine is worrying global investors, who do not want to get caught in policy whiplashes.
“The degree of difficulty to make money in China today is very high,” said Ajay Krishnan, director and lead portfolio manager at Wasatch Global Investors. “And since we do not get paid for the degree of difficulty, we might as well go where it is easy to make money.” Head to The Core to know more.
PODCAST
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Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.
Today, he speaks to Jigar Pandit, Head, Commodities & Currencies, Sharekhan by BNP Paribas, on how war risk premiums are now becoming a new normal. Also in today’s episode: DK Joshi, Chief Economist, Crisil Ratings, on how GST numbers demonstrate lag effect of economic reforms.
POLITICS
The Promises Are Here
On Friday, the world’s biggest election exercise will kick off. The ruling Bharatiya Janata Party (BJP) and its principal rival, the Congress Party (INC), have released their manifestos.
Personal credo: The BJP manifesto is, as expected, dominated by Prime Minister Narendra Modi. The central theme is Modi’s guarantee with the PM’s photo on almost every page. It projects him as a Hindu nationalist leader and an economic champion. It’s short on specifics and high on generalisations. The message clearly is “trust Modi”.
Heavy on sops: The INC’s theme is “work, wealth, welfare”. It is inflationary and perhaps even risks creating fiscal imbalances. The INC promises work for all, and promises to raise the national minimum wage to Rs 400 ($4.78) per day. It vows annual unconditional cash transfer of Rs 1 lakh to every poor household, although it is unclear how they will be identified.
GEOPOLITICS
Indian Carriers, Sailors Caught In West Asian Fires
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India is willy-nilly getting caught in the West Asian war. Over the weekend, Iran’s Revolutionary Guard commandos captured a Portuguese-flagged cargo ship linked to Israel. The ship is steered by at least 17 Indian sailors.
Also, Indian carriers such as Vistara and Air India have been forced to take circuitous routes to avoid the missile-streaked West Asian skies. They are expecting delays and disruptions.
Dialling up the heat: Iran’s proxies launched armed drones and missiles at Israel on Saturday night, marking an escalation in the West Asian conflict. The attack was anticipated after Israel allegedly bombed Iran’s embassy in Damascus, Syria, killing some top military officials.
While the US backed Israel to defend itself, it also moved around its warships to help its ally. A United Nations Security Council meeting was underway as we went to press to discuss an international response to the escalation.
The Signal
Just when it looked like international pressure had begun to show on Israel, which withdrew some troops from Gaza last week, Iran’s military action has the West rallying behind the former. This has brought West Asia on the precipice of a full-scale war, especially if any US assets are attacked. It is bound to affect international trade and commodity prices. India, which is one of the world’s largest consumers of oil and gold, will face pressure on its current account. That could impact inflation, which is anyway expected to go up in the summer months.
FYI
Thought process: Billionaire Gautam Adani is setting up a global think-tank named Chintan Research Foundation with a Rs 100 crore ($12 million) seed capital.
Advance order: Elon Musk’s Tesla has reportedly signed a deal with the Tata Group to source chips from the conglomerate for its global operations.
Not a happy year: Apple’s iPhone shipments fell 10% in January-March this year even as the global smartphone market expanded 7.8%.
Killer dead: Amir Sarfaraz Tamba, accused of assaulting Sarabjit Singh, who was imprisoned in Pakistan on espionage charges and died as a result of the attack inside the prison in 2013, was killed by unidentified gunmen in Lahore.
Booked: The Central Bureau of Investigation has filed FIRs against Megha Engineering, the second-largest buyer of electoral bonds, and eight public sector officials.
THE DAILY DIGIT
5.5%
The drop in auto exports from India in FY24. At 45,00,492, it was lower than what it exported even in 2019. (The Economic Times)
FWIW
Game on: Well-heeled Indian sports enthusiasts are having a field day as the tourism industry bends over backwards to serve them. Indian sportspersons making a mark at world events has given a fillip to the trend as well. The travelling Indian sports fan is emerging as a tourist distinct from the regular sightseers and adventure enthusiasts. They not only want to witness global sports events such as the Super Bowl or Wimbledon but also seek bespoke experiences. They often follow, family in tow, Indian sportspersons to major international destinations too. The rising numbers have carved out a subset in the tourism industry that caters specifically to these superfans, tailoring packages which include tickets to key fixtures, fine-dining and high-end entertainment. Sometimes they arrange meetings with sports stars and personalised gifts from them too.
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