Global markets: Stocks rally sputters as growth fears resurface Asia’s stock markets wobbled lower on Wednesday as reality bit on hopes for a soft economic landing in the United States, and investors curbed their enthusiasm about China’s reopening. The S&P 500 had dropped for a fourth straight session overnight and the brakes have come on a rally that has lasted almost two months. Oil also fell sharply and, with Brent futures at $79.50 a barrel, is back where it began the year. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4% and Japan’s Nikkei fell 0.5%.”Some of the optimism that had driven the rally is being put to the test,” said Shane Oliver, head of investment strategy at Australia’s AMP. “We might be transitioning from a situation of worrying about inflation and interest rates, to one where the negatives become weakening growth and falling profits.” Facebook parent Meta also dragged down markets, with shares sliding 6.8%, following reports that European Union regulators have ruled the company will need to ask users before running advertising based on their personal data. In the United States, big banks are bracing for a worsening economy next year as inflation and rate rises threaten consumer demand, with top executives at Goldman Sachs, J.P. Morgan and Bank of America all sounding downbeat in remarks on Tuesday. Also read| Global Markets: European markets stay cautious after China eases pandemic measures “Economic growth is slowing,” said Goldman Sachs CEO David Solomon. “When I talk to our clients, they sound extremely cautious.”The growth fears rallied longer-dated bonds and helped the safe-haven U.S. dollar to pause its recent retreat.The yield on benchmark 10-year U.S. Treasuries fell 8.6 basis points to 3.513% overnight and was last at 3.5442%. That is more than 80 bps below the two-year yield as investors reckon on high rates hurting growth. Traders in Asia are intently weighing prospects for loosening in China’s COVID-19 controls and what that means for the world’s second-biggest economy and regional demand.Beijing on Tuesday allowed residents into parks, supermarkets, offices and airports without tests.”This alone will start to make a difference to consumption figures if replicated across the country,” said BNY Mellon strategist Geoff Yu.”But execution matters,” he added.”And there are very few precedents for what the country is looking to achieve … the world will need to be braced for the inflation implications, which have accompanied every major re-opening.” Oil prices have been sliding with declining demand expectations and now sit more than 40% below a high of nearly $140 a barrel made shortly after Russia’s invasion of Ukraine.In foreign exchange markets the dollar was seeking to steady after excitement about a slowdown in U.S. rate hikes have knocked it from the year’s highs. It was firm at 137.02 yen in Asia on Wednesday and traded at $1.0467 per euro. The Australian dollar was broadly steady at $0.6707 despite Australian third-quarter growth coming in a bit below forecasts. The Canadian dollar hovered at 1.3644 per dollar ahead of an expected rate hike from the Bank of Canada later on Wednesday. The U.S. dollar index sat at 105.5. Spot gold was steady at $1,773 an ounce and bitcoin , at $17,000, was going nowhere with cryptocurrency sentiment fragile as the fallout from the collapse of FTX ripples through the sector.
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Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.
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Zaggle Prepaid makes muted market debut; shares settle over 3 per cent lower