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Trump Effect triggered Indian and Chinese stock exchanges to decouple

The correlation between the CSI 300 and the Nifty 50 indexes survived Xi Jinping’s ascent to power in 2012 and Narendra Modi’s election in 2014. Donald Trump, however, has succeeded in driving through a wedge.

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Singapore, 1st May 2017: US president Donald Trump has managed to do what Chinese President and Indian Prime minister could not do upon being elected to their respective offices.

The correlation between the CSI 300 and the Nifty 50 indexes survived Xi Jinping’s ascent to power in 2012 and Narendra Modi’s election in 2014. Donald Trump, however, has succeeded in driving a wedge. The link between equity prices of the world’s two most populous economies is now the weakest since at least the 2008 financial crisis. Trump’s effect has severed the relations between Indian and Chinese stock exchanges.

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In some ways, the decoupling predates the US presidential election. Markets that ebb and flow in tandem 30 to 40% of the time had developed minds of their own by the time Britain voted to leave the European Union last summer.
However, correlations are supposed to be mean-reverting. The continued divergence of China and India this year, with the Nifty’s 21% jump in dollar terms overshadowing a 5% gain in the CSI 300, shows that Trump’s policies may be prolonging the separation.

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It isn’t that investors have become relatively more bullish on Indian earnings compared with those in China. On a price-earnings basis, the Nifty has on average enjoyed a 40% premium over the CSI 300 since early 2012. The gap, which widened to almost 100% when Modi’s election as Indian prime minister started to look like a cinch, is currently 29%.

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Even so, every gain in the Indian benchmark is making investors sceptical. A friendless rally, as Gadfly has argued, is good for the market because it’s keeping investors focused on how, for example, Trump’s proposed clampdown on H-1B work visas would hurt India’s software exports. But companies like Tata Consultancy Services Ltd and Infosys Ltd are anyway stoking the embers of a dying industry. What’s not getting enough attention is the impact of the other Trump proposal – “tax reforms”.

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Now, a 15% US corporate tax rate is probably a chimaera, but if the ultimate political compromise in Washington is for a meaningful reduction in what companies pay, the lift to their profitability is bound to make them search for growth markets.

As New Delhi’s own tax reforms pave the way for a common domestic market of 1.25 billion people, some of those US investments could head to India.

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While India has a massive jobs deficit, the almost 6% gain in the rupee this year suggests that becoming the next factory to the world with the help of a cheap currency is not on Modi’s wish list. That’s one more reason why a recoupling of the Chinese and Indian markets is unlikely to happen soon.

– prepared by Nikita Tayal of NewsGram, Twitter: @NikitaTayal6 

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Jaipur Literature Festival Takes A Questionable Stand On The #MeToo Movement

JLF's fast spreading presence in the international arena, calls for a more substantial stand on its part, as far as #MeToo is concerned.

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The hushed whispers are getting louder. Flickr

After several star speakers of the Zee Jaipur Literature Festival, including C.P. Surendran, Suhel Seth and Chetan Bhagat, among others, have been accused of sexually harassing multiple women, on the sidelines of the popular lit fest, the organisers, in a cautiously worded one-sentence tweet on Thursday, have supported the rising tide of the #MeToo campaign in India — but questions still remain.

“The ZEE Jaipur Literature Festival unequivocally stands by the women who have courageously spoken out for equity and dignity and is committed to supporting and amplifying their voices,” the official handle of the JLF said in a tweet on Thursday.

The statement came two days after a petition was started on www.change.org by writer-editor Rajni George, asking its organisers to support the #MeToo India and stand up “against sexual harassment”.

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Jaipur Literature Festival

“We write today regarding the serious and credible allegations of sexual harassment made recently against a number of men in and around the literary world, as part of the MeToo movement in India.

“We, the undersigned, are dismayed, saddened and angered by these accounts. We admire the work that the Jaipur Literature Festival (JLF) undertakes. As India’s largest and most recognised literature festival, we believe JLF is ideally placed to take the lead in addressing this urgent issue,” George’s petition said.

JLF’s response in the one-line tweet is general, and does not specifically mention whether any of the allegations that have now surfaced were earlier brought to the notice of the organisers.

It also does not make it clear whether the doors of the festival will remain closed for the accused in its future editions, or not. It further makes no comment whatsoever on several instances that are said to have taken place on the sidelines of the annual event.

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Sanjoy K. Roy, with writers Namita Gokhale and William Dalrymple as co-directors, has been instrumental in bringing societal issues to the fore.

Notably, many of the accused have featured in prominent sessions at what is described as the “greatest literary show on Earth”, and, in many instances, the festival has been instrumental in increasing their popularity as well as readership.

On its part, JLF, produced by Teamwork Arts, headed by Sanjoy K. Roy, and with writers Namita Gokhale and William Dalrymple as co-directors, has been instrumental in bringing societal issues to the fore. In fact, the 2018 edition of the festival in January this year had come to a close with a hard-hitting debate on #MeToo, long before the campaign gained momentum in India.

Also Read: Watch Jaipur Literature Festival Live On Twitter

Many in the literary circles feel the benchmark that JLF has itself set over the course of its journey, its coming of age and gradual but distinct shift from controversies to substance in the recent years, its fast spreading presence in the international arena, calls for a more substantial stand on its part, as far as #MeToo is concerned. (IANS)