FITCH RATING CUT
Fitch cuts outlook for Tata Steel, union optimistic on jobs in UK
Fitch cut Tata Steel's outlook to negative citing UK operations uncertainty. A delayed 500 million pound grant may cause 2,800 job losses. Tata Steel's net debt is Rs 77,550 crore amid UK losses of 364 million pounds and business-restructuring costs. Unite and Business Secretary Jonathan Reynolds show optimism about new Labour government’s supportive investments.
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.
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.
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.
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.
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.
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