By V K Sharma
“There are decades where nothing happens, and there are weeks where decades happen.”
― Vladimir Ilyich Lenin
Last fortnight was one such period. India has emerged as a prominent world power with the courage to walk its talk — mindfully pursuing its national interests, sidestepping political landmines, and turning threats into opportunities. It signed multiple deals with Japan and was the cynosure of global attention at the SCO summit in China, where an unprecedented bonhomie with Xi and Putin was noted.
By not attending the Victory Day parade in China, India has kept the window open for a thaw in relations with the US. While Trump and his team have called India names and made derogatory remarks, India has maintained composure and restraint. Neither Trump nor future Presidents can raise a finger at India.
BRICS cohesion and domestic resilience
A global reset is underway. Both China and Russia have warned the US that India deserves better treatment. Threats to BRICS have only strengthened the grouping’s cohesion. India assumes the BRICS chair next year, which is expected to make the organisation stronger and more meaningful. Some European countries may also join BRICS next year.
Meanwhile, India has quietly worked on finding new markets for its products in case talks with the US fail. The GST reforms are expected to boost domestic consumption and could add 0.3% to GDP.
US slowdown, Fed stance and Nifty outlook
The resilience of the Indian economy stands out even more when viewed in the global context. The US economy, by contrast, is struggling. The August Non-Farm Payrolls data painted a grim picture. The American economy added only 22,000 jobs, far below the 75,000 expected by economists and sharply lower than the upwardly revised 79,000 for July. Worse still, June figures were revised to show that the US economy had actually lost jobs rather than created them.
As a result, hopes of a jumbo rate cut at the upcoming FOMC meeting on September 16–17 rose, pushing bond yields lower. Both the S&P 500 and the Dow Jones touched new highs in morning trade, but gains faded as markets realised weaker jobs could also mean weaker earnings.
Next week’s inflation data could again shift expectations, but for now, the US seems headed for stagflation—rising inflation coupled with stagnation. That could impact India too, though given our markets have underperformed US indices, this underperformance may soon come to an end.
The Nifty has support at 24,621, 24,533, and 24,404. On the upside, a close above 24,850 could trigger short covering.
Be confidently invested.
(The author is a market veteran with 36 years of experience. He retired from HDFC Securities as head of PCG and capital market strategy)
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