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UBS Group AG advises shorting India's rupee and reducing stock exposure due to a structural economic slowdown, exacerbated by potential challenges from a higher US yield environment. The Indian economy faces long-term issues like declining credit growth and export competitiveness, contributing to significant stock market losses and a depreciating rupee. Recent trends show Indian stocks have lost nearly $500 billion in value, marking the worst start to a year since 2016, while bond outflows are at their fastest since 2020.
UBS Group AG advises investors to short India's rupee and reduce exposure to its stocks, citing a structural economic slowdown that transcends cyclical factors. The bank highlights challenges from rising US yields, a high debt service-to-revenue ratio, and significant market losses, with Indian stocks down nearly $500 billion recently. The Reserve Bank of India faces a dilemma over interest rates as it seeks to stimulate growth amid declining foreign investment and capital outflows.
UBS Group AG has advised investors to short the Indian rupee and adopt an underweight position on Indian stocks, citing a "structural slowdown" in India's $4 trillion economy. This downturn is attributed to weak credit growth, a significant drop in foreign direct investment, and overall economic deceleration, with FDI falling to around $3 billion in the past year. Concerns are heightened by the potential impact of a prolonged high US yield environment on India's growth, given its high debt service-to-revenue ratio among major emerging markets.
UBS Group AG is advising investors to short the Indian rupee and reduce stock holdings, citing a structural slowdown in India's $4 trillion economy. Key factors include declining credit growth, foreign direct investment, and export competitiveness, exacerbated by high US yields and significant market losses, with Indian stocks down nearly $500 billion this year. The rupee has reached record lows against the US dollar, making it Asia's worst-performing currency, while bond outflows are at their fastest since 2020.
UBS Group AG is advising investors to short the Indian rupee and reduce Indian equity holdings, citing a structural economic slowdown in India. Key factors include declining credit growth, foreign direct investment, and export competitiveness, exacerbated by potential high US yields post-Trump's inauguration. Indian equities have lost nearly USD 500 billion in market value, and the rupee has reached record lows against the dollar, while bond markets face significant capital outflows.
UBS Group AG advises investors to short India's rupee and reduce stock exposure, citing a structural economic slowdown driven by declining credit growth, foreign direct investment, and export competitiveness. The rupee has hit record lows against the dollar, while Indian stocks have lost nearly $500 billion in market value, reflecting a broader bearish trend amid rising external risks and disappointing corporate earnings.
Emerging-market equities and currencies are at risk of further declines due to unaccounted threats from potential tariffs imposed by Donald Trump, according to UBS Group AG. The UBS Emerging Markets Risk Appetite Index indicates a strong market sentiment, despite low pricing of risks related to earnings estimates, currency-hedging costs, and credit default swaps.
Emerging-market equities and currencies are at risk of further declines due to unaccounted threats from potential tariffs under Donald Trump, according to UBS. The firm notes that the current market pricing of risks remains historically low, with significant losses already recorded since the US election. China's deflation is enhancing the yuan's competitiveness, which could pressure production and capital expenditure in other emerging markets, particularly as tariffs may slow China's imports and impact commodity exporters. Countries like Mexico, Vietnam, and Korea face heightened uncertainty due to their trade surpluses with the US.
Manik Narain
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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