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Moneycontrol Pro Panorama | China’s growth engine showing signs of fatigue

In today’s edition of Moneycontrol Pro Panorama: HDFC Bank makes a point, HCL Tech has the mojo, HUL’s trial by fire, the Eastern Window, and more

January 17, 2022 / 03:59 PM IST
(Image: Reuters)

(Image: Reuters)


Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

More confirmation that China’s economy is slowing came this week, with GDP growth in the fourth quarter of 2021 coming in at 4 percent, down from 4.9 percent in the third quarter and 18.3 percent a year ago. The slowdown in China’s debt-burdened real estate sector has been a key contributor to the slowdown, although factors such as lockdowns -- to snuff out the spreading Omicron variant — may also have played a part.

The government has been worried about mounting debt in the real estate sector, with the troubles at real estate major Evergrande serving as a warning signal. A cooling of the real estate sector to bring debt down to more controllable levels could continue to weigh on GDP growth. More lockdowns or more severe ones could be a drag as well. But, in a quick show of support, the People’s Bank of China cut interest rates on a medium-term lending facility by 10 basis points, surprising markets.

Whether China does more to support growth remains to be seen. But 2022 may see an interesting situation develop, where China may be easing policy while the rest of the major economies tighten the stimulus screws.

Close

China’s crackdown on technology companies and ‘self-isolating in the name of self-reliance’ may be dragging emerging market indices down, but ex-China the picture looks different writes Ruchir Sharma in today’s selection from the Financial Times​ (free to read for Pro subscribers). He sees signs of revival in emerging markets, led by factors such as a manufacturing recovery, rising commodity prices, growth in the digital economy and financial conservatism. Read to know more about why he believes history may record 2021 as the time that marked the year that EMs embarked on a comeback rally.

We can count India as one of the fiscal conservatives that Sharma writes about. Whether we continue on that path or turn more expansionary will be known in next month’s Budget. Subsidies are one head in the budget that will go as an input in determining the direction. In today’s chart of the day series on the Budget, we show you how subsidies have moved since FY15, which show a steady decline till FY20, but then the pandemic and spike in commodity prices such as fertilizer changed that in FY21.

Investing insights from our research team

HDFC Bank Q3: Strong on lower provisions; can the stock bounce back in 2022?

HCL Tech – Invest for a great FY23

Tata Metaliks: Will performance improve, going forward?
What else are we reading?

Hindustan Unilever: Parent’s ambition could take it into uncharted waters

The Eastern Window | Why China is a threat to India-Maldives ties

Interview | Confident of robust growth as auto markets improve: Tarang Jain, CMD of Varroc

India must join the global mainstream in fighting climate change

Import itch in export exuberance

Lex | GSK: £50bn-plus takeover would leave Unilever omnileveraged (republished from the FT)

Virat Kohli chose to jump before being pushed

Technical Picks: HFCLTech MahindraLIC Housing Finance and Kaveri Seeds (These are published every trading day before markets open)

Ravi Ananthanarayanan

Moneycontrol Pro



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Ravi Ananthanarayanan
first published: Jan 17, 2022 03:52 pm
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