Arvind's Newsletter

1.India is the worst performing stock market among top 10 markets

Among the top 10 markets, India is currently the worst performer in the world. For the first time in over 14 months, India's market capitalisation has fallen below the $4-trillion mark, now standing at $3.91 trillion.

Foreign Institutional Investors (FIIs) have been withdrawing funds from emerging markets and reallocating them to US equity and bond markets. As India's weight in the MSCI index was the highest before the decline, FIIs have been consistently reducing their positions. Their decision to withdraw is further supported by weak corporate performance in the December quarter.

According to an analysis by the Motilal Oswal Financial Services team, Indian companies have reported low single-digit earnings growth for the third consecutive quarter. The Nifty-50 index has achieved only a 4 percent growth in profit after tax (PAT) over the nine months of FY25, a significant decrease compared to the healthy CAGR of over 20 during FY20-24.

The sectors that contributed positively to profit growth include Banking, Financial Services, and Insurance (BFSI), followed by Technology, Telecom, Healthcare, Capital Goods, and Real Estate. On the other hand, earnings growth was negatively impacted by global cyclicals, particularly in the oil and gas sector, where oil marketing companies experienced a year-over-year decline in profits. Additionally, the Cement sector saw a 55 percent drop, Chemicals experienced a 12 percent decline, and Consumer goods faced a 5 percent reduction in earnings.

An analysis of the break-up of the companies reveals some interesting trends: large-cap companies performed in line with expectations, mid-cap companies exceeded expectations while small-cap companies significantly underperformed. Consequently, the market is penalising small-cap stocks.

As John Maynard Keynes famously stated, "Markets can remain irrational longer than you can remain solvent." It is wiser to await market signals of a turnaround rather than attempting to catch a falling knife.

2. China’s Stocks Revival: Bloomberg

DeepSeek’s AI breakthrough is helping drive a rotation of stock funds back into China from India, with bullish hedge funds piling in at the fastest pace in months.

More than $1.3 trillion has been added to onshore and offshore equity markets in the past month, driven by AI hype and hopes for more stimulus. India’s market, by contrast, has shrunk in excess of $720 billion on concerns about waning economic growth, slowing corporate earnings and pricy stock valuations.

There’s still skepticism among traders who’ve been burned by failed China rallies in the past, with some pointing to crowded trading and rising valuations as reasons for caution. Nonetheless, there’s a growing sense in markets that “China’s back.”

3.India rolls out the red carpet for private nuclear firms

France and India last week declared an intent to partner each other to develop advanced modular nuclear reactors and SMRs. Juxtaposed with the recent union budget’s proposals to rework India’s legal framework for nuclear energy and set a rather ambitious capacity addition target, there’s a clear signal to the private sector to step in.

4.India Said to Plan Its First Offshore Airport North of Mumbai at Vadhavan

India is planning to build its first offshore airport near the financial capital of Mumbai, people familiar with the matter said, as part of the Narendra Modi-led government’s efforts to overhaul the country’s infrastructure.

The new airport will be constructed on an artificial island near the Vadhvan seaport on the west coast, according to people familiar who did not want to be identified as the details are private. The upcoming facility will be similar to Hong Kong International Airport and Osaka’s Kansai International Airport which are also built on man-made islands, one of the people said.

In a meeting last month, the project got initial approvals from federal environment and defense departments as well as the Maharashtra state government, they said. Feasibility studies will be initiated, with Airports Authority of India assisting the process, after which an estimated investment figure will emerge, the people said.

5.ADNOC inks $7B+ gas deal with India

ADNOC Gas has secured a long-term role to help meet India’s growing demand for liquefied natural gas. The Abu Dhabi-based producer signed a 14-year deal with Indian Oil Corp. for up to 1.2 million tons annually, valued between $7 billion and $9 billion. Deliveries will begin in 2026.

India’s LNG demand is expected to more than double by 2030, according to the International Energy Agency. The surge is driven by rising gas consumption across industries, transport, and refineries. With India aiming to boost gas in its energy mix, Gulf producers who are expanding production like Oman, Qatar, and the UAE are well-positioned to meet its needs.

6.Beleaguered US chipmaking giant Intel could be bought by rivals and split in two: WSJ

Broadcom, a US firm, is looking to buy Intel’s chip-design and marketing arm, while Taiwan Semiconductor Manufacturing Company is eyeing its manufacturing plants, The Wall Street Journal reported. Intel was once the world’s biggest chipmaker, but has lost ground to Nvidia and Samsung in design and TSMC in manufacturing — last year, it reported a $16.6 billion loss — and has missed out on the artificial intelligence boom.
Intel is still a US manufacturing icon, and represents a huge chunk of American chipmaking, making its possible failure or sale to overseas rivals a significant security concern.

7.US disease monitoring capabilities are disappearing

Half of the Centers of Disease Control and Prevention's Epidemic Intelligence Service officers — a group known as the CDC's "disease detectives" — were among the cuts made Friday by the Trump administration, multiple health officials tell CBS News.

The cuts are among the thousands of probationary workers being let go this week across the federal government as part of efforts to shrink the federal workforce overseen by President Trump and the Department of Government Efficiency, or DOGE, task force headed by billionaire Elon Musk.

The CDC's Epidemic Intelligence Service or EIS officers are hired in annual classes through a competitive process. 

8.Forget the US — Europe has successfully put tariffs on itself: Mario Draghi in Financial Times

The IMF estimates that Europe’s internal barriers are equivalent to a tariff of 45 per cent for manufacturing and 110 per cent for services. These effectively shrink the market in which European companies operate: trade across EU countries is less than half the level of trade across US states. And as activity shifts more towards services, their overall drag on growth becomes worse.

Europe has been effectively raising tariffs within its borders and increasing regulation on a sector that makes up around 70 per cent of EU GDP.

This failure to lower internal barriers has also contributed to Europe’s unusually high trade openness. Since 1999, trade as a share of GDP has risen from 31 per cent to 55 per cent in the eurozone, whereas in China it rose from 34 per cent to 37 per cent and in the US from 23 per cent to just 25 per cent. This openness was an asset in a globalising world. But now it has become a vulnerability.

9.Kazakhstan, the world’s largest producer of uranium, is selling more of the nuclear fuel to Russia and China, raising fears of a supply crunch

It comes as the West pivots to nuclear power to meet growing demand for electricity, as data centres for artificial intelligence take up ever more power supply. Several countries have pledged to triple their nuclear capacity, and uranium demand is set to double by 2040. But Moscow and Beijing have begun a “very aggressive” strategy of buying resources from Asia and Africa, analysts told the Financial Times, and a post-Fukushima uranium glut has been burned through. The industry is “living of borrowed time,” one former nuclear executive said.

10.Baftas 2025: Conclave beats The Brutalist to best picture as Mikey Madison scoops best actress

Conclave, Edward Berger’s Vatican-set thriller starring Ralph Fiennes as a cardinal overseeing the election of a new pope, went into this year’s Bafta ceremony with a dozen nominations – the most of any contender. It ended up with four awards: for best picture, outstanding British film, adapted screenplay and editing.

Accepting the second of those, Berger – who swept the board at the awards two years ago with his remake of All Quiet on the Western Front, which won seven prizes – said: “We live in a time of a crisis of democracy. Institutions used to bringing us together are used to pull us apart. Sometimes it’s hard to keep the faith, and that’s why we make movies.”

Berger, whose film depicts a battle between liberals and traditionalists that threatens to destroy the Catholic church from within, ended his speech by quoting Leonard Cohen: “There’s a crack in everything, that’s how the light gets in.”