World Street: Role reversal in equity space, new crude player in the making, ad war on X front, green banks and more

World Street offers a sneak peek into the global markets.

Are returns on Indian equities getting less rosy compared to their Chinese counterparts? A widening valuation gap between the two of the biggest emerging markets in the world has become the focal point for global market analysts. A slowdown in global economic growth may make industrial metals cheaper next year. Offshore oil boom may turn South Africa a major global player, while a battle of blitzkrieg begins to simmer on the X front. All these and more in World Street today.

Case for China?

Indian equities have handily beaten their Chinese peers in 2023, but some strategists are flagging the possibility of a short-term role reversal as the year draws to a close, reports Bloomberg. A widening valuation gap between the world’s two biggest emerging markets is a common refrain for Societe Generale SA, UBS Group AG and Jefferies Financial Group Inc, who say the outlook for India’s returns has become less rosy.

Soft metal

Industrial metal prices should fall next year as lower global economic growth drags on demand, notably in China, says Fitch Ratings.  It sees London’s 2024 benchmark copper price slipping 2 percent, iron ore by up to 8 percent and zinc by 29 percent. Gold could be an exception due to expected US interest rate cuts next year.

The challenger

South America’s offshore oil boom is set to make the region a major play in global oil markets, challenging OPEC's dominance, reports Oilprice.com. The combined efforts of Guyana and Brazil alone are expected to add nearly 3 million barrels a day of oil production by the end of the decade.

Tax slackers beware

Failing to keep up with tax payments now could lead to an expensive surprise come next spring, reports WSJ. As of October 1, the Internal Revenue Service is charging 8 percent interest on estimated tax underpayments, up from 3 percent two years ago. The increase is one of the many effects of rising interest rates.

Battle of blitz 

Walmart said it is not advertising on social media platform X (formerly Twitter), one of the latest brands to say it has dropped the Elon Musk-owned site. The platform has struggled to retain advertisers since Musk acquired the company in October 2022, and faced a fresh exodus in recent weeks over rising concern about anti-Semitic content.

Going green

Ten of the world's top development banks pledged to step up their climate efforts at the COP28 summit, yet failed to say anything about halting financing for fossil fuel projects, reports Reuters. The group, including the World Bank and regional peers, said the window of opportunity to secure a liveable planet was "rapidly closing".

Tokyo talkies

Japan has yet to achieve price gains driven by higher wages with the recent rise in inflation driven by cost-push factors, Bank of Japan board member Asahi Noguchi said. With inflation exceeding the BOJ's 2 percent target for more than a year, market expectations are heightening that the central bank will exit ultra-loose monetary policy next year.