Markets Fall In Late Trade
The stock markets found it difficult to make up their mind as they tried to find a middle ground between profit booking
On Episode 623 of The Core Report, financial journalist Govindraj Ethiraj talks to Moses Harding John, President & CEO at IndusInd International Holdings Limited, Mauritius. We also feature an excerpt from a recent episode of our show The Media Room featuring Anant Goenka, Executive Director of The Indian Express Group in conversation with media journalist and author Vanita Kohli-Khandekar.
SHOW NOTES
(00:00) Stories of the Day
(01:00) Markets fall in late trade as financials lose for the fourth session
(04:51) Oil prices could touch $60 by year end, says S&P Global
(07:57) India may give in on imports of genetically modified farm products from the US as part of an imminent trade deal
(09:07) Murmurs of dedollarisation are rising again but the challenges remain
(19:44) Indian Express launches a new print edition at a time most media houses are expanding digitally
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Friday the 4th of July, and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.
Our top stories and themes for the day:
The stock markets fall in late trade as financials lose for the fourth session.
India may give in on imports of genetically modified farm products from the United States as part of an imminent trade deal.
Murmurs of de-dollarization are rising again, but the challenges remain.
Oil prices could hit $60 by the year end, says S&P Global,
And the Indian Express launches a new print edition at a time that most media houses are expanding digitally.
Markets Flip In Late Session
The stock markets found it difficult to make up their mind as they tried to find a middle ground between profit booking, particularly in financials, versus tariff deal signals, which seem positive for now at least to the market. The U.S. has announced a deal with Vietnam, and several references have been made about an upcoming deal with India, but both India and Vietnam, as far as I could see, are yet to respond formally. In the case of Vietnam, the United States has said it will impose a 20% tariff on imports and no tariff on exports into Vietnam.
It is possible, of course, but might be good to wait for the official responses from Vietnam, which in some ways will set the stage for other deals which ought to follow very soon. My larger concern, of course, is that there is nothing to say that these deals, even as they're announced amidst fanfare, will be the last word on them. While stock markets take great comfort and joy in these moves, as we've seen, this is in no way an environment that is ideal to take strategic business decisions, including for expansion and growth.
So back to the markets. After staying in the positive for most of the day, the indices suddenly flipped towards the end of trade. The BSE Sensex hit an intraday high of 83,850 but was down 170 points towards close to 83,239. The NSE Nifty 50 was also down 48 points to close at 25,405.
The Nifty Mid Cap 100 index was flat, and the Nifty Small Cap 100 was slightly down, about 0.2 percent. So the sector that took a big hit on Thursday was financials, falling for the fourth straight session after hitting a record high earlier, according to Reuters. The financials index fell about 2.2 percent in four days, though it's still up about 14 percent for the year.
Elsewhere, defence stocks could get a fresh leg up, with the Defence Acquisitions Council led by India's Defence Minister approving about 10 major capital acquisition proposals on Thursday, which is worth about a hundred and five thousand crore rupees or 1.05 trillion rupees, and all of this is through indigenous sourcing. Elsewhere, a Bloomberg report says domestic institutional investors are continuing to power India's equity markets, all that supply pressure that we've been talking of, with net purchases so far in 2025 inching towards last year's record influx. So local funds have already bought a net amount of more than 40 billion dollars in the first half of the year, compared to 63 billion dollars in all of 2024.
In contrast, global investors at this point have pulled about 8 billion dollars from Indian equities, according to Bloomberg data. On Wall Street, U.S. stocks were up on Thursday, with the S&P 500 and Nasdaq Composite hitting fresh record highs, thanks to a better-than-expected jobs report, which fuelled optimism that the U.S. economy was hanging tough despite all the uncertainty around trade policy and geopolitics. The S&P 500 and the Nasdaq were both up just under a percent, and so was the Dow Jones Industrial Average, which was up 282 points, according to CNBC.
On currency, the rupee was at a month's high. This was because of dollar sales from foreign banks and cutting off bearish bets on the rupee, while optimism surrounding a U.S.-India trade deal helped sentiment, according to Reuters, adding that the rupee hit a peak of 85 rupees 20 paise, its best level since late May, before closing the session at 85 rupees 31 paise. Gold prices, meanwhile, are not really moving much right now, because everyone is trying to figure out whether they should, I guess, invest in more safe-haven assets. Spot gold was down to about 3,347 dollars, and futures — that's U.S. gold futures — were at about 3,358 dollars an ounce. Meanwhile, amongst new macroeconomic signals and positive ones, India’s services sector saw its strongest growth in 10 months in June, thanks to strong demand and cooling price pressures, according to the HSBC Final India Services Purchasing Managers Index or PMI, which is compiled by S&P Global.
Where Are Oil Prices Going Now?
Lower oil prices help in more ways than one, apart from the larger macro signals that we keep referring to. For example, jet fuel price costs for all global airlines have eased, as we saw in the latest International Air Transport Association’s report. According to IATA, jet fuel prices in May 2025 were about 19 percent lower than the previous year, and about 4.3 percent below the previous month — that's April. Otherwise, it has been a volatile year for crude prices, and they, as we've seen, have been battered by a host of factors from trade to war. Singapore-based Premashish Das, Executive Director for Oil Markets Research and Analysis at S&P Global Commodity Insights, told the Business Standard newspaper at the Commodity Markets Insight Forum in Delhi that the oil markets are expecting oversupply and weak demand in the second half of 2025. He pointed to the overall tariff and trade uncertainty, but he also predicted a noticeable slowdown in activity and oil demand in the second half, thanks to which S&P is projecting Brent crude to be in the 55 to 60 dollars per barrel range by December 2025, with an average for the second half slightly above 60 dollars due to a higher starting point right now. S&P says that their base case assumes that the Organisation of Petroleum Exporting Countries Plus will not aggressively defend prices in this environment of muted demand growth. If they change course, of course, the forecast would change. A fair amount of uncertainty is priced in, which is why oil had already dropped below 60 dollars for a time, says S&P, before the tensions in West Asia — that's war — pushed it back up. So the market is essentially saying that there is, once you keep these tensions aside, slower global economic activity, sluggish oil demand, and, of course, an increase in supply. Global oil demand, says S&P in that interview to Business Standard, is at around 105 million barrels per day, which will be slow in the second half of the year as opposed to growing. China and India, the two big consumers: China’s oil demand is around 16 million barrels a day, and traditional transport fuel demand — gasoline and fuel — is already at its peak, says S&P. And India will only grow slightly. So why is India not growing as much as one would think? Maybe because of the rise of alternate fuels, including electric vehicles. But an interesting other factor is that auto sales have slowed. Remember, we are talking about a growth in oil consumption, not consumption itself.
Elsewhere in oil and gas, India’s largest oil and gas exploration company — that's ONGC — and Japan shipping company Mitsui OSK Lines have agreed to build and operate two large ships, which will be used to import ethane, a key chemical in the petrochemical industry, according to a Business Standard report again. So boat clearances are awaited, and so are details for this new venture.
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Trade Concessions Are Coming
India may allow imports of some processed genetically modified U.S. farm products as it seeks to strike a trade deal with the United States, in a potential concession after India earlier opposed inflows of genetically modified corn and soya beans, according to a Bloomberg report that came in on Thursday evening. India has banned imports of genetically modified, or GM, corn and soya beans and does not allow local farmers to grow them for food. The Bloomberg report says authorities may agree to inbound shipments of some products used in animal feed, such as soya bean meal and distilled dried grains with solubles, a by-product of corn-based ethanol production. India has been overall cautious towards shipments that could compete with local production, reflecting concerns over rural livelihoods and food security, and there are, of course, cultural issues as well. India already meets about 60 percent of its vegetable oil demand through imports, including soy and canola oils from genetically modified crops. India is also the second-largest cotton grower, with more than 90 percent of cotton genetically modified.
Where Are We On De-Dollarisation?
The dollar is on a weak wicket right now, and there are murmurs about de-dollarization picking up again. An analogy to this, in some ways, was the suggestion of a BRICS currency as a reserve currency to take on the U.S. dollar, to which the U.S. President Donald Trump immediately responded in January this year, when that suggestion emerged, with threats of a hundred percent tariffs. Who would explore such a currency? Be that as it may, there is no doubt options are constantly being explored in this new post-tariff world to see how trade deals can be done in native or other currencies. It is not easy, of course, and there are good reasons why the U.S. dollar is so strong, despite having lost about 10 percent or so this year — for reasons which, of course, have been mostly triggered by the U.S. itself. I reached out to banking veteran Moses Harding John, member, Board of Directors at Reliance Capital, which was acquired by and is now a wholly owned subsidiary of IndusInd International Holdings. I asked him how he was seeing these shifts in the dollar and whether trade equations or the currencies in which trade deals were being executed could see changes.
INTERVIEW TRANSCRIPT
Moses Harding John: See, conceptually, there is no sense for third-party cross-border trade to be denominated U.S. dollar. For example, a trade between China and Russia or China and India need not be invoiced in U.S. dollar because U.S. dollar is not involved in the trade. So this is the concept.
But practically, it is not possible because there is no price transparency and discovery between CMY, IMF, Ruble, and IMF. So because of the lack of liquidity, lack of liquidity leads to lack of price discovery and transparency. So that pushed the stakeholders to use the currency which is more liquid and which is more price transparent.
The alternative they have is U.S. dollar, Euro, GBP, Japanese yen. So these are the four alternative that have because 90% of the trade happens in U.S. dollar. So the liquidity is in U.S. dollar. And within the 90%, 30-40% comes from Euro dollar, sterling dollar, and yen dollar. So these are the dominant force. So we cannot wish away from that.
So ideally, although there is a post-Trump tariff, there is a talk of pushing the need for non-dollar invoicing in a big way. So the countries who do not bilateral trades can be bartered. But can be bartered at what value, number one.
Second, how you will deal with the deficit or surplus. Will India like to, if you take China-India, they have a deficit. How you are going to have the deficit?
Will China agree to invest the surplus in Indian markets? I don't know. So these are the practical issues that come into play that gives an advantage to the U.S. dollar as a high liquid currency and safe haven currency. And ideologically, U.S. dollar and the Western markets have a low political risk. Everybody, the stakeholders have the comfort that my money is safe when it's in U.S. or Eurozone or U.K. And nobody has that comfort whether my surplus can be retained in China or Russia or anywhere else. So these are the practical issues around the de-dollarization.
The process has begun. See, U.S. dollar has seen its best. That's all.
The best is behind. So it's in the downhill. But in the space of the downhill, I have my own doubts.
Govindraj Ethiraj: Okay. So let me pick up one or two points that you've talked about. You said that one reason why de-dollarization is tough is because other currencies are not demonstrating the level of transparency or price transparency.
And liquidity. So is that something that countries can work on or maybe they're already, not maybe, I'm sure they are working on, given the fact that you want to create some sort of defence against uncertain trade environment or in an uncertain trade environment?
Moses Harding John: So I'll take a simple example. Take the Indian markets. USD INR is mostly traded, say for a Euro importer or exporter.
Does it have the Euro INR pricing in India? No. So necessarily, you have to do the Euro dollar, but then dollar INR.
So that's what is going to accelerate the process of de-dollarization so that each non-U.S. countries have to develop their local markets, liquidity, where in India, we generate a market for Euro INR, Sterling INR, NINR, CNY INR, Ruble INR. When that markets happen, then the non-dollar invoicing will pick up. How we are going to develop that market, we don't know.
It's still on drawing board. We have not thought about it. So I think the powers that be and the regulators need to work on developing the non-dollar domestic currency markets, that will accelerate the process of moving into de-dollarization.
Govindraj Ethiraj: Right. So you said that the best days of the dollar are behind us. And obviously, we've seen sustained weakness this year.
It's down 10% now, the dollar index. Two questions. Why are you saying that it's the best days are behind us?
I mean, couldn't there be a recovery? And therefore, I'm assuming you're referring to a longer-term trend. And indeed, if the best days are behind us, then what does that mean going forward?
Moses Harding John: See, the charm for retaining foreign currency reserves in dollar is lost. Most of the countries are moving away from the dollar to non-dollar Eurozone currencies, where the political risk is low, and also the gold. We have seen the gold value.
So people started looking for alternative U.S. dollar. They have lost the comfort and confidence on the dollar. So that earlier, probably 90% of the reserves was held in U.S. dollars. Subsequently, it was invested in U.S. dollars. So that has not gone. So the anti-U.S. bloc of China, Russia, and the neutral bloc of GCC, India, and others, these are the major economies that together can challenge the U.S. GDP size. Now they are on the back foot. That's why now the demand for U.S. dollar treasury that was available to U.S. economy the last year, it's down by 20% today. And it will go down further.
And the next step is if the dollar peg is removed from petrol and the gold and other commodities, then it's the next downhill step for the dollar. So as long as the gold and the commodities are priced in dollar, they are relatively safe.
Govindraj Ethiraj: But when that goes into de-dollar erosion, then the problem starts for the U.S. And looking ahead, I mean, I'm assuming this is not too, it is far ahead, but if it's not that far ahead, how should companies or even India as a country be thinking about this change? I mean, I'm sure we are already thinking about it.
Moses Harding John: See, as far as possible, India's foreign currency reserves are around $700 billion. And India is a neutral bloc. It's neither with the U.S. or anti-U.S. as far as cross-border trade and investment is concerned. So I don't see India changing that strategy in a big way. Although they will not like to add their dollar portfolio, they're already migrating into euro and gold. I think that strategy will remain.
And going forward, if U.S. considers India as an ally and like Japan or others, like Africa, Australia and others, then probably India will turn biassed towards U.S. That's the problem. I see India's in a neutral territory, playing ball with U.S. and its allies and the other side, China and the like. Luckily on the strength for India is coming from the growth.
Now we are talking about 4 trillion, we are talking about 8 trillion by 2030 or so. So as long as we keep up the momentum, I think our bargaining capacity capability will improve. That will bring us close to both the U.S. lobby and the anti-U.S. lobby. I think that's the positive signal as far as India is concerned.
Govindraj Ethiraj: And last sort of supplemental question. So you're saying even large companies who have an active trade portfolio or a trading portfolio, exporters, for example, you feel they should not have a strategy that's independent of this or they should essentially follow the sovereign?
Moses Harding John: See basically it's because of the bargaining power that the Indian importer-exporter will have to invoice his currency in INR. Because assuming INR is a trading partner of GCC, if you go away from U.S. dollar, you have to either invoice in Saudi Riyal or INR. Who is comfortable to invoice in that currency?
So for an importer-exporter, there will be a conflict in which local currency to be invoiced. And the barter system cannot happen in the company's level. It has to happen at the country level.
So basically, RBI has to create an escrow account where this INR and Saudi Riyal invoicing pass through. They have a kind of a reference rate. So a reference rate mechanism has to evolve to help IOC and oil importers to invoice it in INR or Saudi Riyal.
So that's the role of the regulator in providing this price transparency and discovery mechanism is very important and relevant. I think that's the first point all central banks can look to move away from the dollar invoicing.
Govindraj Ethiraj: Right. And then that's a good point to end on. Moses Harding, thank you so much for joining me today.
Moses Harding John: Thank you. Thank you.
Print Is Growing
Last month, the Indian Express Group launched a Patna edition for its newspaper, the 11th edition of the daily published from across India. It also turns out that Indian Express founder Ramnath Goenka was born in Darbhanga in Bihar, the state of which Patna is the capital. Now that may not have been the only reason for the launch of its Patna edition, but the larger question, of course, is what is the thinking behind expanding traditional newspaper editions now, in 2025, when you would have thought that most audiences are fleeing — if not have fled already — to digital? Vanita Kohli-Khandekar, veteran media industry journalist and who also hosts The Media Room on The Core, put this and other questions to Anant Goenka, Executive Director at Indian Express for the last 13 years. Goenka, incidentally, studied journalism at the USC Annenberg School of Communication and Journalism before returning to India to join Express.
INTERVIEW TRANSCRIPT
Vanita Kohli-Khandekar: And that's a high investment game, if I'm not mistaken.
Anant Goenka: I guess, but I guess that's why Express has been different. We've always invested in domain experts, you know, like our agricultural guy, Harish Jambulta, the top guy, you know, our investigative journalists are the best in the country, our agricultural guy is the best, our political guy is the best. I mean, when I say the best, I'm not giving him a title or them a title.
I'm just saying, you know, you have to invest in them.
Vanita Kohli-Khandekar: Tell me, what are your priorities for the next two, three years, Sam? Where are we headed with the group?
Anant Goenka: I don't want to say publicly, I shouldn't be saying publicly because I'm nervous that I won't succeed, but you're asking me. I think our first party data play, we have to figure that out and make it more robust. So I think that's going to be a big part of our thought process now.
Vanita Kohli-Khandekar: First party data play mean?
Anant Goenka: Our own data, so our own user data and how we can use that to create a better personalisation engine, increase engagement and loyalty of our audiences, make the bottom of the funnel more sticky. How do we make programmatic advertising perform better? I mean, the New York Times on programmatic will sell ads at $20 CPM.
In India, we're selling at 80 rupees, right? It just doesn't make sense. And 80 CPM, I'm seeing is our sort of mixed number with all the regional that we have, all the languages, English is, you know, but the regional guys, they're selling at 40 rupees, 50 rupees.
I'm just like, what are you all doing? Like, just don't sell it. Don't put any ad, forget it.
That's an issue. So I think first party data is a big answer to that. We have launched a Patna edition, which is very exciting for us in the year 2025.
Like I said earlier, I think people are not realising that there is a lot of young college students, just graduated students who are interested in becoming intelligent and smarter and impressing their employer in a job interview or impressing their peers or just kind of being smarter. And I think that that is an audience that is not in Bombay, Delhi, Bangalore, Calcutta, Chennai only, it is across the country. And I think that's an audience that we are going to continue focussing on as a newspaper and as a digital entity.
We have a new app, a very nice, shiny new app that's come out, which I'm sort of excited about. And last but not least, small passion project, we bought screen back from Star TV a few months ago. It's something that I felt an emotional attachment to, but also I feel like something that I think there is an opportunity as a business to explore, to do entertainment news in a very credible way and in a very express way.
We have been doing, I mean, we've got about between 20 to 40 million user base a month on entertainment news. But people don't know that because nobody associates express with entertainment. It's all sideways traffic.
It was all sideways traffic. The audience base became loyal and steady, which is what gave me the confidence to get screen back. So now all that is screen.
That will be an exciting thing going forward. We're also excited about some cool, innovative things we're doing on Financial Express because there is a higher yield on financial news and information than on the general user information. So that's exciting.
And for whatever it's worth, I think, I mean, I'm to blame for this. I think we've been struggling to get the video piece at Express right for a long time. Buck stops with me, but I think finally I'm feeling some confidence.
I'm reasonably happy with our video first presence on Instagram, with our YouTube channel. We're getting better and better. So I think we're going to be finally, you know, a good multimedia news destination.
And so, yeah, those are the things we're working on.
Vanita Kohli-Khandekar: Just to come back to this whole question of corporate ownership and structures which help you to dig deep and invest in digital and do all the things. Because news to me seems, and if I look at some of the most expressive brands globally, they all have a trust for a not-for-profit element in their ownership. So I mentioned Guardian, FT, I think many others.
I mean, I did a research piece on this one time back. What is your sense? Is that an ownership structure which is more friendly to doing credible news and yet building a good business?
Anant Goenka: So look, I mean, firstly, I'm not sure that FT is, I don't know about FT, but Guardian, of course, Axial Springer is trying to put most of its news in a not-for-profit. I know, I think Lamont also is trying.
Vanita Kohli-Khandekar: FT is 50% owned by employees, if I'm not mistaken.
Anant Goenka: For that, I think they think of it as a good business to have employees owning the company. So I don't think we have come to a point in India yet, and maybe India is different, where, you know, news has to be charity. I had an adda with Bill Gates recently, where I asked him this, I asked him, would you prefer being, if you had to choose between being interviewed by an Instagram influencer or a newspaper, who would you choose?
And he said, 100 times a newspaper. And he said that, you know, he said, but I am concerned that, you know, that the kind of the way they help government to account around the world, especially in America, you know, if that fades, then what happens to local governance? And, you know, he said, maybe there is some kind of a charity or some kind of donations that kind of roll in.
I think we don't realise how much the world needs news, good sort of credible news. I think the tech platforms need news the most. Google suddenly need news.
All the AI engines need news. No way that an artificial, any artificial intelligence engine can answer any question about India, if it doesn't have at least 10-15 sources of news information that it can learn from, right? Now, just because it's been published on a website, shouldn't mean that that's fair play for them to use that information and provide a service to their audiences without compensating the original IPO, right?
I think this is a tricky part that we really need to figure out. I think if the law can create an incentive for original content, I'm saying original content, financial, there should be enough financial incentive to produce original content.
