Date: 27th November 2023 | Publication: Ausbiz
India’s lower cost base advantage
U.S. manufactured goods fell more than expected in October as orders for cars and parts dropped amid strikes by vehicle manufacturing workers. This combined with a slowdown in CapEx investment suggesting to economists that underlying momentum in the US economy is beginning to fade. U.S. consumers’ inflation expectations over the next year rose for a second straight month in November to 4.5%, despite signs of slowing price increases. And jobless claims fell more than expected last week dropping to a seasonally adjusted 209 thousand, the lowest level in more than a month. The jobless data helped a rebound in Treasury yields as the futures market lowered the likelihood of a rate cut by early next year.
a Reuters poll forecasts most key global stock indices to rise modestly over the coming year, closing 2024 below record highs. The pan-European benchmark STOXX 600 index is forecast to rise around 4%. While Japan’s Nikkei 225 and India’s BSE index are both expected to continue their strong performance into the next year with the Nikkei expected to reach a three-decade high of 35,000 by June of next year and the BSE forecast to hit new highs in 2024.
To discuss that outlook and the status of Corporate India, Mugunthan Siva, MD of India Avenue Investment Management, points to debt to equity levels at an all-time low and potential for market dominance in the global economy. He explores India’s stance in comparison to other emerging markets, such as Bangladesh, Vietnam, and Indonesia. He says India’s edge could lie in its blend of both a growing consumer market and low-cost manufacturing hubs as a rapidly growing population fuels a booming economy through increasing consumption and penetration of digitisation.
