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India Insider: K-Shaped Economy via Growth and Inequality

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

India Insider: K-Shaped Economy via Growth and Inequality

ndia’s growth story remains inspiring, supported by the National Democratic Alliance (NDA) government’s policies that attract foreign capital into infrastructure projects. The last decade has seen improvements in railways, ports, bridges and highways. In Financial Year 2025 (1st April 2024 to 31st March 2025), gross Foreign Direct Investment inflows reached USD 81.04 billion, a 14% rise from the previous year, reflecting global investor confidence under the China+ strategy. However, net FDI shrank to just USD 353 million, its lowest on record, as significant divestments and profit repatriations offset the inflows.

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Auto Sales in India from 1st of April 2024 to the 31st of March 2025

India’s stock market has rallied recently, driven by strong corporate performance despite tariff-related jitters. Corporate capital expenditures by listed non-financial companies rose over 20% year-on-year to exceed 11 lakh crore ($125 billion USD) in FY25, surpassing the government’s capital expenditures of 10.5 lakh crore ($120 billion USD). This signals robust investment by large firms.

In contrast, the unlisted corporate sector, contributing two-thirds of corporate value added and holding most corporate debt, remains weak with falling profits and tax payments. The divergence comes from the markets they serve: listed firms cater to higher-income households, while unlisted firms rely on low and middle income consumers, where progress and recovery is slower. Corporate tax receipts remain healthy, but are largely driven by listed firms. Collections in FY25 reached 12.72 lakh crore ($145 billion USD), while net direct tax collections climbed to 22.26 lakh crore ($254.97 billion USD).

Consumer trends mirror this imbalance. Passenger vehicle sales hit a record 4.3 million units, led by SUVs and luxury cars, while entry level cars and two-wheelers saw subdued demand. The aspirational middle class, especially tech professionals in their late 20s and 30s, drives premium demand, leaving the mass market segments of the population behind.

Nearly half of the nation’s workforce remains in low productivity sectors contributing only a fifth of national income. Wage growth is stagnant in several States. Micro, medium and small enterprises struggle with credit, policy bottlenecks, and institutional constraints. This is India’s K-shaped economy as large corporates and affluent consumers thrive, while smaller businesses and lower-income groups lag. India’s booming economy hasn’t delivered progress for all quite yet.

The country remains the fastest-growing major economy in the world, above 6%. A crucial question is whether this astonishing growth will create mass employment and better equality. Unfortunately, without updated consumer expenditures data since 2011–12 due to the lack of a recent census, policymakers rely on capital expenditure and earnings trends to gauge consumption patterns which deliver incomplete insights. The next census for India is scheduled to be conducted in 2027. More transparency is needed statistically to help alleviate the K-shaped results via the Indian economy.

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India Insider: Booming GDP & Fragile Foundations of Growth

by with No Comment AMT MarketsCommoditiesFeatured Highlights

India Insider: Booming GDP & Fragile Foundations of Growth

India’s economic footprint on the global stage is expanding significantly each year. As the world’s largest democracy, the nation achieved a remarkable 7.4% GDP growth rate January to March of this fiscal year. Yet, beneath this impressive headline, job creation remains tepid, overshadowed by slowing foreign direct investments (FDI) and lower corporate investments from India’s domestic market.

Despite Prime Minister Narendra Modi’s initiative to attract manufacturing into India and boost jobs, the manufacturing share of GDP has stubbornly clung to 16% for the last decade. While India’s services sector accounts around 55% of GDP, the IT and allied services sectors contributes a mere 3-4% of total employment. Even after the last two decades in which India’s Asian neighbors have shifted labor force out of agriculture and into high scale manufacturing, 45% of India’s workforce still are employed in agriculture and aligned services constituting only 15-17% of GDP.

Speculative Capital, Excessive Credit and Rising Financial Risk

Between 2003 and 2023, India attracted approximately $275 Billion USD from foreign capital inflows, encompassing mostly equity and debt foreign portfolio investments. These capital injections are speculative in nature, primarily chasing returns in financial markets, rather than being directly invested into long-term productive infrastructure like manufacturing and export oriented industries.

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Foreign Portfolio Investment into India 2003 to 2023

Interestingly, India’s public sector banks especially between 2008 and 2015 aggressively lent to infrastructure, real estate and capital intensive projects. The state owned banks tried to fill the gap left behind by private investors. A substantial share of these loans later turned into non-performing loans, exacerbating a duel crisis as corporate and bank balance sheets came under severe stress within a few years. The government of India stepped in and injected 3.1 lakh crore Rupees ($45 Billion USD) to recapitalize the struggling banks, and also orchestrated mergers of weaker banks with stronger banks. India’s citizens helped cover these costs via higher taxes and hidden banking charges.

Reserve Bank of India: FX Reserves and Liquidity Dynamics 

As of financial year 2025, the RBI’S Foreign Exchange Reserves stand at around $696 billion USD. While a stronger reserve buffer is crucial for maintaining external stability, the Reserve Bank of India’s purchase of foreign currency to build reserves leads to problems with domestic Rupee liquidity and creates liabilities for the RBI’s balance sheet. Unless it’s not fully absorbed via Open Market operations, it will end up as excess liquidity in the banking system.

Post 2020 and the Covid19 pandemic, loose monetary policy and excess liquidity within the banking system has culminated with more reckless lending. Unsecured retail credit particularly in personal loans, credit cards and consumer finance is troubling. Non-banking financial companies (shadow banking) and fintech enterprises also expanded rapidly into this segment and now pose risks.

India Falling into Debt Trap 

Per a recent survey conducted by the RBI,  household financial savings have sharply declined to a five decade low of 5.1% of GDP in FY2023, down from 11.5% in 2021. Concurrently, household liabilities have risen, particularly in the unsecured credit segment.

Delinquencies in small ticket personal loans and “Buy Now, Pay Later“ programs are on the rise, prompting the RBI to intervene recently with tightening of personal loan norms in late 2023. This dynamic suggests that excessive credit creation, unaccompanied by productive or real income growth, is fueling a fragile boom in consumption backed predominately by debt especially among middle and lower income groups.

Lower Net Foreign Direct Investment amid Higher Repatriation

Even with coordinated efforts from the likes of Apple, Foxconn (Hon Hai Technology Group) and other electronics companies setting up facilities, and the assembly of manufactured goods like iPhones as part of the “China Plus“ strategy, a more comprehensive method of doing business and improved proactive FDI policy is needed. Overall results are still falling short. Evidence shows many companies continue to choose Vietnam and Mexico over India, which is clearly reflected in the lower net FDI figures in India’s Balance of Payments. In financial year 2024-25, net FDI fell 96% to $353 million USD, caused by a surge of money being repatriated out of India led by foreign companies, and also increased foreign investments by Indian companies to other nations, per the Hindu magazine.

The irony is that India needs foreign capital to finance its current accounts deficit, long-term capital investment would boost jobs and increase wages. As the central Indian government practices an austerity drive and its corporations show an unwillingness to invest, India needs higher foreign capital at this crucial juncture. How will India achieve this task? Without better employment and raising wages, India’s celebrated growth faces risks from underlying cracks.

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AMT Top Ten Miscellaneous Entries for the 22nd of March 2024

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Entries for the 22nd of March 2024

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10: Jefferson: Jon Meacham’s Thomas Jefferson The Art of Power provides well written historical and psychological insights concerning one of the U.S Founding Fathers.

9. Shohei Ohtani: Major League Baseball has a gambling scandal. Claims that Ohtani’s interpreter ‘stole’ over 4 million USD from the player to pay off gambling debts beg for questions.

8. Saudi Arabia: The nation has announced it plans on investing 40 billion USD into Artificial Intelligence sector companies via its Public Investment Fund (sovereign wealth fund) and potential business partners.

7. Steve Jobs: Apple’s innovation and tech leadership appears to be weakening as the absence of its deceased leader fades into memory, and competitors grow.

6. Bank of Japan: Monetary policy was finally shifted on Tuesday, an interest rate of 0.10% was instituted, today’s National Core CPI data came in at 2.8%. USD/JPY is currently around 151.400 suggesting financial institutions believe the BoJ Policy Rate may have to be raised again.

5. Gold & Forex: The precious metal challenged 2223.00 USD on Wednesday after the Fed’s FOMC rhetoric but is trading near 2165.00 as of this morning, this as the USD has gotten stronger again producing FX volatility.

4. Hot Chocolate: Cocoa finished yesterday at 8477.0 USD per metric ton, the commodity cost 2880.0 USD one year ago. What and who are manipulating the market?

3. China: Official Foreign Direct Investment statistics are supposed to be released soon. China argues that the fall of foreign investment capital is being reported with bias and not taking into consideration the impact of coronavirus, global monetary policy changes, and cyclical investment fluctuations. However, the FDI numbers remain troublesome and should be watched.

2. Risk Appetite: Major U.S equity indices including the S&P 500, Nasdaq Composite, and Dow Jones 30 are challenging record highs as behavioral sentiment remains exuberant, along with Japan’s Nikkei 225.

1. Interest Rates: The Federal Reserve has hinted three interest rate cuts ‘could’ happen this year, this while inflation in housing, transportation and food remain significant for U.S consumers. The Fed seems to be indicating it believes U.S jobs data will get worse. Political shadows hover over the central bank as the presidential election draws closer. The Fed only has 6 FOMC meetings left and appears to be playing with fire.

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Forex and Equities Storm: Crucial Data will Impact Markets

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Forex and Equities Storm: Crucial Data will Impact Markets

Today will start out with a rather important consumer report from the U.S and day traders should stay alert. It is easy to point to every day and week as being a crucial circumstance for speculators, because that is what gets their juices moving and gets them to wager in the markets.

However, given the rather choppy conditions in Forex seen since the last week of December and pointing to the results of the Consumer Price Index on the 13th of February and the storms created in FX, traders hopefully have enough muscle memory to remember how they felt in the midst of the whipsaw conditions which were experienced only two weeks ago.

Central bank outlooks are fragile among analysts and financial institutions. Simply put this week’s data could prove to be more important than the CPI numbers. Consumer sentiment, GDP, and inflation statistics are all on the U.S roll call this week.

Other geographies will make news too and impact global markets. Last week’s impressive results from Nvidia created another massive wave of positive momentum in equity indices. The Nasdaq 100, S&P 500 and the Dow Jones 30 all have hit record values. Japan’s Nikkei 225 has surpassed record heights.

Yet, other barometers do highlight caution abounds too, U.S Treasuries yields have edged upwards and are touching values which show there is nervousness regarding monetary policy from the U.S Federal Reserve. This week’s data will deliver more insights for investors, and Treasuries are certainly going to react to the economic reports.

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Gold One Month Chart as of 27th of February 2024

Gold has edged higher in the past week and is around the 2034.00 USD mark as of this writing. The slight climb above the 2020.00 ratio which has worked like a magnet recently, indicates some traders may be leaning optimistically towards a weaker USD mid and long-term. These folks may be proven correct, but day traders should note that the 2030.00 ratio in gold is below highs seen in December, January and early February – which indicates nervousness. If day traders do not believe gold acts as an inverse barometer for the USD, simply look at the results of trading when the stronger than expected CPI numbers were released on the 13th of February. Gold fell to a low near 1985.00 on the 14th, this was not a coincidence.

Again, while it is easy to sound alarms and jump up and down and proclaim every week important for day traders, the acknowledgement that this week’s economic data is significant should not be treated as hyperbole. You have been warned.

Monday, 26th of February, U.S New Home Sales – yesterday’s results showed another decline in the housing market, and the previous month’s number was revised downwards. The outcome may point to concerns about U.S mortgage rates which remain stubbornly high for those considering purchases.

Tuesday, 27th of February, U.S Durable Goods Orders – a rather large drop of minus -4.9% is expected. The Core data however is expected to produce a rise of 0.2%. These numbers will be a good precursor for the important consumer sentiment which will follow one and a half hours later.

Tuesday, 27th of February, U.S Consumer Confidence via the Conference Board – the results of the important readings have shown intriguing gains since late fall in 2023. While improvement in sentiment has been recorded, revisions lower have also been seen in the previous three reports. The outcome of today’s report should be treated carefully. If another higher reading is produced this may create some positive momentum in the USD momentarily.

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NZD/USD Three Month Chart as of 27th February 2024

Wednesday, 28th of February, Reserve Bank of New Zealand Official Cash Rate and Monetary Policy Statement – while many Forex traders will be sleeping when the RBNZ makes its important pronouncement, New Zealand inflation data has remained strong and a conservative government is in charge politically that is pro-business. The question is if the Reserve Bank of New Zealand will go against the grain of other global central banks and actually increase their interest rate while others seem to be adamant about trying to become less aggressive. While many analysts believe the RBNZ will sit on its hands and act according to the whims of others, if an interest rate hike is announced global Forex traders should take note because it would be a signal that central bankers are uneasy regarding their rhetoric and not in agreement.

Wednesday, 28th of February, U.S Preliminary Gross Domestic Product – a gain of 3.3% is the expectation from many analysts. The previous reading was stronger than anticipated. If growth numbers in the U.S come in higher than estimated the USD will react with strength. The Federal Reserve would like to see the outcome meet the expectation or come in below, this so the U.S central bank can consider reducing the Federal Funds Rate late this spring or in early summer. However, if a significantly strong growth number is demonstrated this would cause turmoil in Forex.

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EUR/USD Six Month Chart as of 27th February 2024

Thursday, 29th of February, Germany Preliminary Consumer Price Index – a slight gain is expected in the inflation number. The EUR/USD has been struggling as stagflation concerns shadow the European Union. A higher inflation result will not be welcomed by the ECB, which would prefer to cut interest rates sooner rather than later. The German number should be watched and it will cause an impact if there is a surprise. The EUR/USD has been turbulent and is likely to produce more choppy conditions depending on the parade of data results this week.

Thursday, 29th of February, U.S Core Personal Consumption Expenditures Price Index – traders who have felt the previous economic reports already have caused intense reactions this week should brace for this inflation report. A result of 0.4% is expected. The Federal Reserve admits this is one of the most important publications that it monitors. This means financial institutions react to this report too. If inflation were to come in higher than expected, like the CPI results from two weeks ago, this would essentially kill off expectations of a May interest rate cut from the Fed. The USD will react to this report and so will U.S Treasury yields, which means equity indices will also be affected. A weaker inflation report is being wished for by many market participants, but will this be the result?

Friday, 1st of March, China Manufacturing PMI – not to beat a dead horse, but China’s economic data has been poor and this report will be viewed as important. Another negative outcome is expected. Transparency regarding economic numbers from China is a worry for investors. Conditions in China are being watched and it is important for traders to eliminate bias regarding their perspectives. China may be struggling, but its importance as an economic power is still very much in evidence. Foreign direct investment into China is diminishing, but plenty of investors still have ‘skin in the game’ and will be affected by the manufacturing reports.

Friday, 1st of March, U.S Manufacturing PMI via ISM – a slightly improved manufacturing reading is expected. However, because of the U.S data releases from the previous days, the results may be looked at only momentarily and not cause much of a reaction from market participants. Traders may be looking forward to the weekend after this week’s economic publications in order to rest.

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AMT Top Ten Miscellaneous Flakes for 19th of January 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Flakes for 19th of January 2024

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10. Music: Come On, Come Over performed by Jaco Pastorius. The bass playing on this song is magnificent.

9. Cybersecurity: Prospect of quantum computing is making Central Banks nervous, quantum development will impact blockchain and make current payment systems vulnerable and perhaps obsolete. Post-quantum cryptography development is vital.

8. Frigid Weather: Tesla owners have dealt with battery power failures as winter temperatures have plummeted in Chicagoland and elsewhere. EV energy solutions need to improve.

7. China: Over the past 11 months FDI (foreign direct investment) has dropped more than 10% in the nation, an estimated short fall of 145.51 billion USD. China’s Foreign Direct Investment release has seemingly been pushed off to next week. Shanghai Composite (SSE) near 2832.28.

6. Energy Sector: WTI Crude Oil still priced politely as ‘interactions’ with Houthis flare. Natural Gas values remain near lows while North America suffers from a deep freeze.

5. Risk Assessment: Iran and Pakistan, although expressing ‘brotherly love’ for each other, have exchanged missiles across their respective border aimed at extremists.

4. U.S Treasuries: Inversion has almost ended completely, 5-Year Notes up to 30-Year Bonds yields have returned to ‘norms’.

3. Gold: Price of the precious metal near 2027.00 USD having bounced higher after challenging the 2000.00 vicinity on Wednesday.

2. Data: Consumer Sentiment reading via University of Michigan on the schedule today, this could provide impetus to markets that appear to be waiting for the next big push.

1. FX Volatility: USD strength has pushed the greenback towards important mid-term resistance in Forex as many day traders are likely still fighting the trend.

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Week Ahead: Summer Begins with Questions Lurking for Traders

by with No Comment AMT MarketsAssetsFeatured Highlights

Week Ahead: Summer Begins with Questions Lurking for Traders

Monday, the 19th of June, China Foreign Direct Investment – data from China has been lackluster and last week’s announcement of a stimulus program from the government underscores economic concerns regarding growth.

Monday, the 19th of June, U.S banking holiday – for commemoration of Juneteenth.

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AUD/USD Three Month Chart as of 18th June 2023

Tuesday, the 20th of June, Australia Monetary Policy Meeting Minutes – report from the Reserve Bank of Australia will interest AUD traders and those with an interest in Asian Pacific economics.

Tuesday, the 20th of June, U.S FOMC member John Willliams – as the President of the New York Federal Reserve, Williams, is a key member regarding policy. Taking into consideration last week’s pause, traders may want to pay attention to the New York Fed Presidents’s remarks to see if the pause in Federal Funds Rates seen last week is looked upon as a halt or a ‘skip’ by Williams. The difference between a pause and a skip may appear to be semantics, but a skip would mean an interest rate hike is coming in July. Williams is not going to say what is going to happen at the next Federal Reserve meeting, but he may give a hint regarding his opinion on what should be done.

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GBP/USD Three Month Chart as of 18th June 2023

Wednesday, the 21st of June, U.K Consumer Price Index – the data will be important regarding inflation insights for Britain. The Bank of England is expected to raise their Official Bank Rate on Thursday by 0.25%. Another report showing stubborn inflation could set the table for a rather hawkish Monetary Policy Statement from the BoE.

Wednesday, the 21st of June, U.S Federal Reserve Chairman Powell testimony – the Fed Chairman will begin two days of speaking and taking questions. The first day will be before the House of Representatives and the second day in front of the Senate. Because a major election is coming in the U.S in 2024, this will be an opportunity for politicians from both sides of the aisle to get airtime and take a ‘stance’ while bludgeoning Jerome Powell. The Fed Chairman’s remarks could stir the markets slightly, but Powell will be as careful as possible not to put a scare into the financial sector.

Thursday, the 22nd of June, U.K Bank of England – the Official Bank Rate, Monetary Policy Summary and vote count from the Monetary Policy Committee will be released. A hike has been widely expected by GBP traders and has been factored into the British Pound already.

Thursday, the 22nd of June, U.S Existing Home Sales – the housing report will cause a few murmurs in the marketplace because it is seen as an extension of consumer health and interest rate policy in the U.S regarding behavioral sentiment. Existing home sales numbers have been dropping as people with homes have decided to stay put in their current residences. ‘Locked in’ interest rates are more attractive, instead of taking on a higher rate via a new purchase due to costlier mortgages because of more expensive borrowing fees.

Friday, the 23rd of June, E.U Manufacturing and Services PMI – the flash reports from the likes of Germany, France and the U.K should be watched. Manufacturing readings have been producing recessionary readings while Services data is expected to show incremental decreases too.

Friday, the 23rd of June, U.S Manufacturing and Services PMI – the flash reports via the Purchasing Managers Index data need to be monitored too from the States. The readings give a rather good insight regarding outlook of U.S business sentiment.