FITCH RATING CUT
India's downstream oil and gas profits to fall; upstream to remain strong: Fitch Ratings
India's oil and gas sector is forecasted to have mixed fiscal performance in FY24, with downstream profits expected to decline while upstream growth remains robust, driven by a 3-4% increase in petroleum product demand for FY25. Diesel and petrol will dominate consumption, with anticipated stable marketing margins for oil marketing companies. Upstream companies will continue high capex for production growth, while crude oil import dependency is projected to increase despite rising domestic production.
Debt ceiling standoff could trigger US rating downgrade, TD's Goldberg says
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, warns of a potential severe debt ceiling standoff in the U.S. in 2025, similar to the 2011 crisis, which could lead to another sovereign credit rating downgrade. Despite Congress suspending the debt ceiling until 2025, concerns over rising U.S. debt persist following forecasts by the Congressional Budget Office of significant deficits for fiscal years 2024 and 2025.
Fitch raises FY25 India GDP growth forecast to 7.2 per cent
In its Global Economic Outlook (GEO) released Monday, it raised its forecast for world growth in 2024 to 2.6% from 2.4% estimated earlier. India's economy grew 8.2% in FY24. "We expect the Indian economy to expand by a strong 7.2% in FY25 (an upward revision of 0.2pp from the March GEO)," Fitch Ratings said, adding that investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence. Purchasing managers survey data point to continued growth at the start of the current financial year.
Fitch raises India's FY25 growth forecast but isn't that optimistic about global growth
Fitch Ratings has increased India's growth forecast for the current financial year to 7.2% from 7%, driven by rapid investment expansion. The Indian economy grew 7.8% in the last quarter of FY24 and 8.2% for the entire fiscal year. Fitch predicts sustained investment growth under Prime Minister Modi, a recovery in consumer spending, and declining inflation rates. The RBI is expected to make only a modest rate cut this year.
Modi 3.0: How different will be the third Modi government
Narendra Modi is scheduled to take take oath for the third term as India's Prime Minister in a changed political landscape. Allies demand concessions, potentially affecting economic agenda. Expectations for populist budget with focus on welfare and rural areas, though concerns raised over economic impact. Reform agenda may face challenges due to weakened mandate, but continuity likely in infrastructure investment and business environment improvements.
Wall Street ends lower amid rate concerns, higher bond yields
Stocks declined following the Beige Book release, showing U.S. economic expansion and reduced rate cut expectations, per CME FedWatch Tool.
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Dow slips nearly 1%, Nasdaq below 17,000 as rate worries push bond yields higher
Megacaps Microsoft, Alphabet and Meta dipped between 0.3% and 0.6% as U.S. bond yields across the board rose to near four-week highs after Tuesday's unexpectedly strong consumer confidence data. The Dow led declines, falling to its lowest in nearly one month, and all major S&P 500 subsectors were in the red in early trading.
RBI's ₹2 lakh-crore boost may help India's new govt have an easy-peasy run to achieve a goal
The RBI on May 22 announced a record-high dividend transfer to the government equivalent to 0.6 per cent of GDP ( Rs 2.1 lakh) from its operations in FY24. The figure has surpassed the 0.3 per cent of GDP expected in the FY25 budget from February. Hence, the rating agency said that it will aid the authorities in meeting near-term deficit reduction goals.
China set to post slowing growth on housing, consumption woes
China's economy is expected to have slowed in the first quarter due to challenges in the property sector and weak consumer activity. Despite setting a growth target of around five percent for the year, analysts view this goal as ambitious. While industrial production has increased, consumption remains sluggish. The property market continues to be a concern, with falling home prices and challenges for developers. Policymakers have introduced measures to boost infrastructure spending and consumption, but more stimulus may be needed.
Fitch raises India’s FY25 growth forecast to 7%
Fitch Ratings raised India's FY25 growth forecast to 7%, driven by robust domestic demand and investment. India's economy showed over 8% growth in the first three quarters of the year. Fitch projects FY24 growth at 7.8% and expects inflation to cool to 4% by the end of FY25, prompting potential rate cuts by RBI.
Fitch revises India FY24, FY25 GDP forecast upwards, expects economy to continue 'strong expansion'
Fitch Ratings revised India's GDP growth forecast upwards for FY24 to 7.8% and for FY25 to 7.0%, citing strong economic expansion driven by domestic demand, particularly investment. Meanwhile, it downgraded China's 2024 forecast to 4.5%, attributing it to property sector challenges and deflationary pressures, despite increased fiscal support.
New York Community Bancorp stock value set to halve, as Moody's cuts ratings
Shares of New York Community Bancorp lost 22% on Tuesday, extending a sell-off since the lender reported a surprise quarterly loss last week, as Moody's downgraded its long-term debt ratings to junk status
Moody's downgrades China's bad banks
Moody's action is the latest alarm sounded over the property sector ills' spillover across the economy, despite Beijing's pledges for support policies. It also resembles a sector-wide downgrade by Fitch Ratings earlier this year.
Fitch affirms India rating at BBB- with stable outlook; revises growth numbers
“India's rating is underpinned by a robust medium-term GDP growth outlook and sound external finances, which remain intact as the country has effectively navigated a fraught external environment in the past few years,” the global rating agency noted.
Fitch Ratings affirms India's long-term FX rating at 'BBB-' with stable outlook
Fitch forecasts GDP growth of 6.9% in the fiscal year ending March 2024, which is well above its earlier forecast of 6.0%. However, growth is likely to ease to 6.5% in FY25, Fitch predicts.
Fitch affirms 'BBB-' rating for India with a stable outlook amid strong growth
Fitch emphasized that India's investment landscape is expected to be a key driver of economic growth, citing the continuation of the government's capital expenditure drive and a gradual acceleration of private investment. Despite the positive outlook, Fitch points out that beyond the fiscal year 2024, there is increased uncertainty regarding the fiscal path.
Asia Pacific sectors navigate economic crosswinds amid strong growth in 2024: Fitch Ratings
Fitch Ratings predicts robust economic growth in APAC's emerging markets like India, Indonesia, the Philippines, and Vietnam in 2024. However, challenges, including slower Chinese growth and global demand, might affect various sectors. While sectors in China face headwinds, particularly property developers and banks, a sharper slowdown there could impact the region adversely. Evolving economic dynamics, government policies, and global market conditions will sway sector-specific outlooks, especially affecting banking sectors in developed markets due to the peaking interest rate cycle. Geopolitical tensions could prompt supply chain diversification, notably influencing industrial and technology sectors.
Better profitability to support corporate rating headroom: Fitch Ratings
However, Fitch has warned that a sharp or sustained rise in energy prices, given the ongoing geo-political risks, presents downside risks to the projection. On the economy, it expects the country to be among the world's fastest-growing large sovereigns, with resilient GDP growth of 6.5 per cent in FY25, marginally down from a likely 6.9 per cent GDP print this fiscal.
Fitch 'neutral' on China, flags realty risks
China's economic growth will moderate to 4.6% next year from 5.3% in 2023, the ratings agency said in a Wednesday report titled "Greater China Outlook 2024." While a greater usage of fiscal policy will limit downside risks, Fitch noted such supports may keep fiscal deficits wide at a time when the country's fiscal metrics have already eroded compared to peers with similar sovereign ratings.
World growth likely to decline in 2024 even as US avoids recession, Fitch
Fitch Ratings' Global Economic Outlook forecasts a decline in global growth to 2.1% in 2024 from the robust 2023 performance. While 2023 saw resilient growth fueled by China's consumption uptick and US resurgence, challenges like China's property slump, Eurozone stagnation, and monetary tightening could lead to this slowdown.
Higher oil prices could lead to higher than expected inflation rates in 2024: Fitch
“World GDP growth would be 0.4pp lower in 2024, but only 0.1pp lower in 2025, although the absence of a significant rebound suggests there could be a persistent moderate impact beyond the initial shock,” Fitch said.
Take Five: That rate cut trade
China continues to battle its property demons while it is Italy's turn to be in the eye of the ratings agencies.
India growth may moderate in Q3 while China property slump casts shadow on global prospects: Fitch
Fitch Ratings predicts that India's economic growth will slow in the third quarter, despite the country's resilience in the face of tighter monetary policy and weak exports. Fitch has maintained India's growth target for fiscal year 2024 at 6.3%. However, it warns that the deepening slump in China's property market is casting a shadow over global growth prospects. Fitch has raised its forecast for global growth in 2023 by 0.1 percentage point to 2.5%, but has cut its 2024 world growth forecast by 0.2 percentage points to 1.9%.
Fitch cuts China’s 2023 GDP forecast by 80 bps to 4.8%, affirms A+ rating
Rating agency Fitch on Thursday lowered China's 2023 GDP growth forecast to 4.8 per cent from 5.6 per cent earlier. The agency attributed the cut to the fading effect of removal of Covid-19 restrictions. The agency affirmed China's long-term foreign currency issuer default ratings at 'A+' with a stable outlook, supported by the country's strong external finances.
Fitch’s US downgrade is stoking the very fight it warned against
Fitch Ratings' decision to downgrade US government debt has been seized upon by rival political factions as a new weapon of combat in their never-ending war, and finger pointing has already commenced. Although President Biden has yet to publicly comment on the ratings cut, aides claim he was initially irritated about the news. The House Freedom Caucus, a group of Republican lawmakers, is demanding lower spending levels during the looming shutdown fight, while Biden’s team has blamed Donald Trump for the reduction.
Fitch move spotlights US debt risk as recession fear fades
Fitch Ratings has downgraded US government credit from AAA to AA+ based on the medium-term fiscal outlook characterised by rising deficits and government debt. The downgrade is a signal that the US needs to get its budgetary process in order ahead of what looks like another political fight this fall, and although the Federal Reserve no longer expects a US downturn, Fitch expects a mild recession in the US in the fourth quarter this year and first quarter of 2024. US debt is predicted to reach 118% of gross domestic product by 2025, three times higher than the median of 39%.
US stock market: Wall Street ends down, investors step back after Fitch US rating cut
Fitch downgraded the United States to AA+ from AAA late on Tuesday, citing expected fiscal deterioration over the next three years as well as growing government debt. Fitch was the second major agency to cut the country's rating. In 2011 Standard & Poor's stripped the country of its triple-A grade.
Fitch cuts US credit rating to AA+; Treasury calls it 'arbitrary'
With the downgrade, it becomes the second major rating agency after Standard & Poor's to strip the United States of its triple-A rating. The dollar fell across a range of currencies, stock futures ticked down and Treasury futures rose after the announcement. But several investors and analysts said they expected the impact of the downgrade to be limited.
Will Fitch cut in the US ratings impact Indian market? Hemang Jani answers
The Indian earnings season is going well with about 33 Nifty companies delivering decent numbers. Despite the downgrade of the US rating by Fitch Ratings from AAA to AA+, there is no need to be too concerned as the broader trend for the Indian market is positive. The hospitality industry is looking particularly good with strong traction in occupancy and pricing.
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