Rise With Profit: US Markets Tread Water, Clouds Over Global Growth, Bajaj Finance Earnings

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It was another lacklustre day of trade in global markets overnight—Wall Street treaded water, as traders remain uncertain which way the political winds are blowing just days ahead of the US Presidential Election. In case you’ve missed it, the yield on the 10-year bond in the US has now spiked to 4.22%. That’s a jump of about 50 basis points over the past month, which is very significant.

In the Asia Pacific region, too, there’s a bit of a muted start with the three early risers all rangebound at the start.

A big talking point last evening was the latest projections for global growth by the International Monetary Fund. The IMF raised its outlook for the US, while reducing expectations for both China and Europe. It kept its overall global growth projection unchanged at 3.2% for 2024.

The IMF has raised its projection for the US economy to 2.8% in 2024, which is slightly lower than the 2.9% achieved last year, but up from the previous expectation of 2.6%. This improved growth has been driven by strong consumer spending, which in turn has been driven by a rise in inflation-adjusted wages, it said. Next year, though, the IMF expects the US economy to decelerate to 2.2% growth.

The growth forecast for China, meanwhile, has been cut to 4.8% from 5% earlier and is only marginally lower than the official estimates.

Finally, India's gross domestic product growth is likely to moderate from 8.2% in 2023 to 7% in 2024 and 6.5% in 2025. The IMF says this is because the pent-up demand accumulated during the Covid-19 pandemic has waned.

And while the global growth picture has looked better, the IMF points out that the battle against inflation has by and large been won in most major economies.

Turning to news from back home—I’d watch for the start of trade today to see whether there’ll be a break in the selling. It’s already been a tough week for Dalal Street, but that selling got much worse in the last hour of trade on Tuesday. Despite the selling and the fall from the all-time highs, the Indian market isn’t yet in a correction. We’re currently 6.8% lower from the peak at the end of last month for the benchmark Nifty 50. Even the small cap index has fallen about 7.5%. By definition, a 5% fall is called a pullback and a 10% fall is called a correction.

A lot of sharp reactions in the market are on the back of earnings. And you could see one today for Bajaj Finance Ltd. The company has raised its credit cost guidance to 2.00-2.05% for the current financial year from 1.75-1.85% earlier. These costs are tied to asset quality and a rise in bad loans. Loan loss and provisions have risen by 77%, because of a rise in stressed assets, which had not yet turned NPA. The company’s profit, meanwhile, rose 13% and was largely in line with expectations because of a strong growth in net interest income.

There are more earnings that were reported of course, but I’m focusing on a few. Zomato Ltd.'s net profit fell in the second quarter of fiscal 2025 to miss analysts' estimates, even as the food delivery giant continued to expand its top line. Net profit was down 30% at Rs 176 crore in the July-September period. This compares to Rs 253 crore in the preceding quarter ended June 30. Additionally, there wasn’t too much in the way of guidance on what the company plans to do with proceeds from its upcoming QIP for.

It's going to be a busy day on the earnings front today—among the top companies are Hindustan Unilever Ltd., Godrej Properties Ltd., SBI Life Insurance Co. and TVS Motor Co. But there’s a total of 73 companies releasing their second quarter earnings today.

In other news, Prime Minister Narendra Modi has arrived in Russia to attend the 16th BRICS Summit, where he is likely to hold bilateral meetings, including with Russian President Vladimir Putin and Chinese President Xi Jinping.

And in national news, the flurry of hoax bomb threats over the past week has caused airlines losses to the tune of Rs 500 crore so far, according to an NDTV report. So far, around 200 flights have received bomb threat calls. These threats have led to the disruption of the plane's schedule and, in some cases, also led to flight diversions.