India's largest trade deficit with any single country is with China, and Chinese President Xi Jinping - visiting PM Modi in New Delhi - pledged to invest $20B over five years to help narrow the difference.
China is India's largest trade partner, with the two doing $68.5B of business last year, and India posting a trade shortfall of $34.4B. Xi's visit follows one from Japanese PM Shinzo Abe at which he pledged more than $30B in Indian infrastructure investments.
The Sensex gained 1.8% overnight. EPI +3.1%, PIN +2.5%.
ICICI Bank (IBN +3.1%), HDFC Bank (HDB +1.3%), Tata Motors (TTM +1.6%)
Signaling growing concern over the slowing economy, the PBOC overnight cut the 14-day repurchase rate by 20 basis points to 3.5%. This follows the previous day's $81B cash injection into the nation's 5-largest banks.
"This is a significant policy signal," says Liu Dongliang from China Merchants Bank. "The chances of a benchmark interest rate cut are rising because the central bank is clearly guiding interbank rates lower now."
The latest sign of the economic slowdown was a report last night showing property prices sliding for a fourth straight month.
Shanghai was higher by 0.35% overnight, while the Hang Seng fell 0.85%.
What if you held at TLTRO and nobody came? The pressure rises on Mario Draghi to move forward with full-blown QE after European banks step up to borrow just €82.6B from the ECB at a fixed rate of 0.15% in the targeted longer-term refinancing operation. A Bloomberg survey had expected a €100B-€300B range of borrowing.
“This low figure is making the probability of fully-blown QE much higher,” says a fixed-income fund manager. “The target to raise the ECB balance-sheet size to roughly €3T will be attained, either through lending to banks or through direct investment into the markets.”
“This was clearly a failed operation,” says an analyst at Nordea Markets. “It puts pressure on them to also succeed with their covered-bond and ABS programs. Ultimately, even if you include those, it will be difficult for them to reach the balance-sheet target they have.”
The euro (NYSEARCA:FXE) is higher by 0.25% to $1.2890.
Moody's this morning informed France it will downgrade its government rating to AA2 from AA1. (L'Opinion)
Citigroup analyst Peter Goves said earlier this week he expected the ratings agency to put France on review for a possible downgrade tomorrow. Still, the move was not unanticipated, and there is no immediate reaction apparent in French or EU securities.
Toshiba (OTCPK:TOSBF) is moving forward with the restructuring of its PC business, cutting 900 jobs and exiting its business-to-consumer operations in some regions.
The Japanese conglomerate expects the restructuring to slash operating profit by ¥45B ($414M), but did not change its earnings forecast for the current year to March, as better-than-expected earnings in electricity and other operations offset the impact.
Toshiba will also cut fixed costs by more than ¥20B vs. the previous fiscal year and reduce the number of sales bases around the world to 13 from 32.
The U.S. House of Representatives has approved President Barack Obama's plan to train and arm Syrian rebels in the fight against Islamic State, although the amendment did not include the $500M the White House says it needs for the training.
The spending bill, including the training plan, will only go to Obama to be signed once it passes in the Senate, which can come as early as today.
Though most of the polls give the "No" (to breaking away from the U.K.) camp the lead, the pound (NYSEARCA:FXB) is behaving a bit nervously. It's now slightly lower on the session after being up nicely this morning following a larger-than-expected decline in unemployment.
Independence would be "an economic trapdoor down which we go, from which me might never escape," says former U.K. PM Gordon Brown in the sort of fear-mongering comment becoming fairly typical from politicians who support the status quo.
“Secession would be a catastrophe for Scotland,” says Spanish foreign minister Garcia-Margallo. “It would start a process of Balkanization that nobody in Europe wants.” Spain, of course, has its own secession issues in Catalonia.
The U.K. banks are showing little nervousness, with Barclays (BCS +0.8%), RBS (RBS +0.8%), and Lloyds (LYG +1.5%) all in the green, and HSBC (HSBC) just marginally lower.
The move percolated somewhat positively through Asian equity markets overnight, but fell short of something more sweeping - say a cut in interest rates - out of Beijing. Some warn the move won't do a whole lot as bank liquidity isn't the issue, but instead slow loan demand from businesses and consumers.
The PBOC's action is in the form of 3-month, low-rate loans to banks, according to a bank executive briefed on the action. While there are no explicit conditions attached to the money, says the executive, the PBOC wants to see credit channeled into areas Beijing's central planners have deemed important to the economy.
Among the recent evidence pointing to a slowing economy: Industrial production growth hit a six-year low in August, and foreign direct investment hit a four-year low.