India sees steepest earnings downgrades in Asia: Forward 12-month earnings estimates for Indian large- and mid-cap firms dropped by 1.2% over the past two weeks — the sharpest fall in Asia, Reuters reports, citing LSEG IBES data. The cuts come as the US’ 50% tariff on India — set to take effect on 27 August — raises growth risks — even with proposed domestic tax cuts looking to soften the blow.

The downgrades follow another disappointing reporting season, extending a slowdown that began last year. Corporate earnings growth has been stuck in single digits for five straight quarters, down from 15-25% in 2020-2023. “After disappointing earnings growth of only 6% in 2024, the pace of recovery remains sluggish in 2025,” said Rajat Agarwal, Asia equity strategist at Société Générale.

Autos + consumer sectors hit the hardest: Automobiles, capital goods, F&Bs, and consumer durables all saw earnings forecasts cut by around 1% or more. This comes despite the fact that Nifty 50 firms derive just 9% of their revenues from the US.

Valuations could be next: Analysts warn stretched valuations could leave Indian equities vulnerable if tariffs persist. “We could potentially see the tariff triggering a broad valuation re-rating downwards and make some of the domestic oriented stocks attractive,” says Raisah Rasid, strategist at JP Morgan Asset Management.

Gov’t leans on tax reforms to boost growth: To counter external pressures, Indian Prime Minister Narendra Modi has unveiled sweeping consumption tax cuts, proposing a two-rate structure of 5% and 18% instead of the previous 12% and 28% tax that was imposed on some items. Economists at Standard Chartered expect the reforms to lift GDP growth by 0.35-0.45 percentage points by FY 2027. MUFG, however, expects sustained 50% tariffs to reduce India’s GDP growth by one percentage point, with the textiles sector among the hardest hit.

Despite the policy support, foreign investors are pulling back. Bank of America’s latest fund manager survey shows that India has slid from the most-preferred to the least-preferred Asian equity market in just two months, as doubts grow over valuations and the pace of earnings growth.

MARKETS THIS MORNING-

Asian markets are mixed this morning, with South Korea’s Kospi leading gains with a 1.2% jump, and Japan’s Nikkei dipping 0.1% at the open. Meanwhile, China’s CSI 300 was trading flat, and Hong Kong’s Hang Seng was up 0.3%. Over on Wall Street, futures inched up slightly following a losing session yesterday, as investors await US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

ADX

10,200

-0.0% (YTD: +8.3%)

DFM

6,128

+0.1% (YTD: +18.8%)

Nasdaq Dubai UAE20

4,986

-0.1% (YTD: +19.7%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.2% o/n

4.2% 1 yr

TASI

10,867

-0.1% (YTD: -9.8%)

EGX30

35,622

-0.3% (YTD: +19.8%)

S&P 500

6,370

-0.4% (YTD: +8.3%)

FTSE 100

9,309

+0.2% (YTD: +13.9%)

Euro Stoxx 50

5,462

-0.2% (YTD: +11.6%)

Brent crude

USD 67.64

-0.0%

Natural gas (Nymex)

USD 2.81

-0.5%

Gold

USD 3,381.1

-0.0%

BTC

USD 112,135

-1.8% (YTD: +18.7%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.49

-0.3% (YTD: +0.2%)

S&P MENA Bond & Sukuk

148.39

+0.0% (YTD: +6%)

VIX (Volatility Index)

16.6

+5.8% (YTD: -4.3%)

THE CLOSING BELL-

The DFM rose 0.1% yesterday on turnover of AED 427.5 mn. The index is up 18.8% YTD.

In the green: National Cement Company (+6.6%), Emirates Reem Investments Company (+6.3%) and Dubai National Ins. and Reins. (+5.7%).

In the red: Sukoon Takaful (-9.4%), Chimera S&P UAE Sharjah ETF – Share class B – Income (-6.2%) and Al Mal Capital REIT (-2.3%).

Over on the ADX, the index remained flat on turnover of AED 905.5 mn. Meanwhile, Nasdaq Dubai was down 0.1%

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