The economic forecast for India remains positive with S&P predicting a rapid growth rate of 7% by the fiscal year 2026-27. This optimism is reflected in the country’s stock market valuation surpassing $4 trillion, securing its position as the fifth-largest in the world.
Additionally, inflation readings have shown moderation with core Consumer Price Index (CPI) at 4.5% and overall CPI at 4.87% year-on-year as of October. These figures are consistent with expectations that the Reserve Bank of India (RBI) will likely maintain the repo rate at the current level of 6.5%.
In contrast to India’s services sector performance, US economic indicators have presented a mixed picture with an increase in ISM Services PMI to 52.7, indicating expansion in the services sector. However, there has been a decrease in JOLTS Job Openings to levels not seen since March 2021.
These developments are influencing market expectations regarding the Federal Reserve’s interest rate policy, with some investors anticipating a potential pause or reversal in rate hikes between March and May.
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