Comment by Riaz Haq on May 29, 2023 at 11:59am

Last week’s stellar revival in Adani Group stocks has helped India reclaim its position among the world’s five largest stock markets.

https://qz.com/adani-put-india-back-in-top-five-stock-markets-list-1850484425

India lost its fifth position to France after the US-based Hindenburg Research in January, accused the country’s ports-to-power conglomerate Adani Group of “brazen stock manipulation” and “accounting fraud,” Bloomberg reported today (May 29). The allegations triggered a sell-off in Adani stocks, dragging the indices sharply lower.

However, as of May 26, stock market capitalization stood at $3.3 trillion in India, driven by foreign fund inflows into Indian shares—and a sharp recovery in Adani stocks. 

Foreign investors bought shares worth $4.5 billion in May so far, a little more than a two-fold increase from last month, according to India’s National Securities Depository. Adani’s listed entities added around $15 billion to their market value last week, recovering some of their post-Hindenburg losses.

Now France has been pushed out of the top-five list again after the country’s stock indices lost more than $100 billion in market value last week. This was caused by a sell-off in shares of luxury goods companies such as LVMH Moet Hennessy Louis Vuitton and Vivendi, due to fears of a slowdown in China and the US.

Investors are choosing India over China

India’s prospect as one of the world’s fastest-growing economies is alluring. 

Rival China, on the other hand, seems to have taken a backseat due to a stuttering economy. Beijing’s isolationist Covid-19 policies, turmoil in its real estate industry, and a harsh anti-trust campaign against the country’s valuable tech firms have crushed sentiments for Chinese assets, economists say.

Mark Mobius, founder of Mobius Capital Partners and a market expert, also sees India as a viable alternative. “You’ve got a billion people (Indians), they can do the same thing that the Chinese do. They can do the same kind of manufacturing and so forth,” Mobius told Fox Business in March.

Last week, Christopher Wood, strategist at Jefferies Financial Group, increased the weight of Indian stocks in his Asia Pacific portfolio, excluding Japan, Bloomberg reported. This reflects the dismay among investors when it comes to the Chinese stock market.

Comment by Riaz Haq on August 31, 2023 at 10:31am

From Google Gen AI

India's current account deficit widened to $13.4 billion in Q4FY22, which is 1.5% of GDP. The capital account deficit was $1.7 billion in Q4FY22, which was the first deficit since the Taper Tantrum episode in September 2013.
The current account tracks the flow of imports and exports.
A current account deficit occurs when the inflow of foreign currency from exports is less than the outflow of foreign currency from imports.
The capital account tracks the flow of assets and liabilities.
A capital account deficit occurs when the debit items are more than the credit items. This indicates a net outflow of capital from the country.
The sum of the current and capital accounts is always zero. This means that when a country has a deficit in its current account, it necessarily has a surplus in its capital account and vice versa.
India generally has a capital account surplus because it attracts a large share of foreign investments.

https://prepp.in/news/e-492-capital-account-indian-economy-notes

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