Morgan Stanley believes India can lift nominal growth toward 12% even as a West Asia crude oil crisis squeezes the global outlook. The bank says earnings growth has already turned after a six-quarter mid-cycle slowdown and should improve further, supported by RBI and government reflationary steps such as rate cuts, bank deregulation, liquidity infusion, and targeted capex in energy, defence, semiconductors, fertilisers, and data centres. Challenges remain, including limited direct AI exposure for equities and AI disruption risks for services exports.
Indian government bonds closed April near end-of-March levels after a drop on Thursday. The slide followed a rise in crude oil prices and a jump in US Treasury yields, which pressured Asian rates. Even as central bank policy stayed relatively dovish and eased some anxiety, the broader signals left downside risks for bond prices.
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The Indian rupee ended Tuesday higher, helped by unwinding of leftover arbitrage positions. At the same time, traders shifted attention to two potential market triggers: a US deadline tied to reaching a deal with Iran and the Reserve Bank of India’s upcoming monetary policy decision, both expected to shape currency and rate expectations.
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