Moneycontrol Pro Weekender | Don’t panic

Intrepid travellers in today’s global financial markets too could draw much needed succour from those brave words.

AI worries sent stock markets crashing around the globe, and the oldest move in the book followed: Money fled equities and piled into US Treasuries, pushing yields lower. The technology sold as the future of everything has sent the world’s money sprinting towards the safety of an IOU from Trump’s Washington.

Of course, nobody agrees on what AI does to the economy. The FT asks how worried central bankers should be about AI and inflation, which is a polite way of saying the homework hasn’t been done yet. Does it make everything cheaper, or does the spending binge on chips and data centres push prices up? At the moment, we just don’t know.

Pouring oil on these troubled waters doesn’t help, it makes things worse. You’d think more ships going through the Strait of Hormuz would cool prices. Instead, here’s a piece on why oil keeps climbing even as Hormuz traffic recovers. One ‘leading currency strategist’ declares that $95 is cheap for oil, with $140 by February and $500 by 2030. That last forecast, of course, may be less analysis and more performance art.

Indian companies, though, march ahead firmly, ignoring the oil slick. This month’s HSBC Flash PMI has the comforting headline, ‘Business activity rises markedly in October as inflationary pressures soften further’. That fits in neatly with the MPC’s reading of resilient growth, and they will be heartened by the PMI’s finding that the rise in manufacturers’ selling prices is the softest in almost four years. What’s more, thanks to our refining capacity, India has emerged as a global fuel swing supplier — my colleague Shishir Asthana writes, “As wars, sanctions and drone strikes redraw the map of fuel supply, India has stepped in as the supplier that buyers on three continents can turn to.”

We pointed out, however, that while India’s core sector growth jumped to 7.9 percent in September, most of it was due to the base effect mirage. In other words, headline great, fine print less thrilling.

Indeed, ‘buts’ and ‘howevers’ are also seen in the Q2 earnings where the mood is of ‘strong quarter… but’. Sample some of the headlines: Swiggy Q2 FY27: Instamart growth revives, but losses remain a drag; Havells India: Q2 growth widens, but margin pressure persists; Mahindra Finance: Strong Q2 FY27, but near-term challenges cloud outlook; Axis Bank-Hits and misses go hand in hand. This roundup of the top three private banks says all of them have one soft spot, while the headline for Bajaj Finance is — Q2 stable, but catalysts missing for stock upside.

That brings us to the Indian markets. The economy may be holding up better than the markets suggest, but that doesn’t mean Indian equities can ignore the risks. The 10-year government bond yield has climbed to a multi-year high. This piece says the terminal policy repo rate in this upcycle should be 6.25 percent, 75 basis points higher than now. The Nifty continues to skid. And the rupee, despite frantic efforts to prop it up, is slipping again. Bernstein says India looks cheaper, but is still expensive.

Nevertheless, there’s always a bright side. The shining example here, of course, is the thumping success of the Jio Platforms IPO, which proves that in an uncertain environment, there’s an enormous appetite for quality stocks. The Q2 results of Indian Hotels and Eternal too have been very good. There’s also a notion going around that India may benefit if the global AI party ends badly. After all, those who stayed out of the casino have less to lose when the roulette wheel stops.

And so, we arrive at the FT’s reflection on why we just can’t quit the site formerly known as Twitter. Markets wobble, central bankers fret, oil heads for the stratosphere, and we all keep scrolling anyway.

Which brings us back to Douglas Adams, who also decreed that the most massively useful thing an interstellar hitchhiker can carry is a towel. Pack it, then, for the weeks ahead. Use it to wipe the cold sweat when the screen turns red because a chatbot sneezed in California. Use it to mop your brow when an oil forecast promises $500 a barrel and you wonder if you misread the zeroes. Wrap it around your head when the “strong quarter, but” arrives. Whatever happens, remember the large friendly letters and do not throw in the towel.

Cheers,

Manas Chakravarty

In case you missed them, here are some of the other stories and insights we published this week, apart from our technical picks in the equity, commodity, and forex markets:

Stocks

Sagility, Power Grid, Colgate Palmolive India, 360 ONE WAM, Ultratech Cement, Metro Brands, HDFC Bank, ICICI Bank, Federal Bank, LTM

Markets

Financial Times

Is Mark Zuckerberg being greedy? Let shareholders decide

Companies & Sectors

As gold loans drive credit expansion for NBFCs, early signs of distress emerge

IT firms beat low expectations as AI business starts to pay

Sugar Mills: Will 26 percent increase in sugar prices offset ethanol feedstock restrictions?

SC verdict on Yes Bank AT1 bond debacle is a blot on RBI and a warning to banks

UltraTech’s Q2 results: Key takeaways for cement makers

Iron ore prices fall below 2025 lows

Mankind Pharma’s innovation bets’ payoff calls for investor patience

Economy & Policy

India’s RE capacity rises, but generation mix lags peers

Tech & Startups

What went wrong with eMudhra’s security certificates and why it matters?

As AI rewrites the rules of business, are Indian boardrooms ready?

Can the RDI Fund jumpstart India’s sluggish VC market?

AI contracts unlikely to follow traditional multiyear deal model, says LTM CEO

AI agents expose gaps in conventional cyber defences, security firms warn

Geopolitics & Geoeconomics

Rubio Visit: How India can turn its industrial muscle into geopolitical power

The Eastern Window | Trade gap vs investment access: The bargain Beijing wants