China’s newly released economic indicators have laid bare the growing impact of its escalating trade confrontation with the United States. Fresh figures from the National Bureau of Statistics show that Chinese industrial profits plunged sharply to –5.5 per cent in October, marking a dramatic reversal from the 21.6 per cent profit growth recorded in September. This downturn follows a profit rise of 20.4 per cent in August and 1.9 per cent in October 2024, underscoring the volatility gripping the country’s industrial sector.
A major friction point has been China’s recent announcement that it will impose curbs on rare earth exports beginning December. China is responsible for nearly 90 per cent of global rare earth exports, and its decision has deeply angered US President Donald Trump. The geopolitical tensions intensified further when Trump threatened a new round of punitive import tariffs ranging from 100 per cent to 155 per cent on Chinese goods. The repercussions of this prolonged dispute have been especially severe for critical industries. Profit growth in China’s mining sector plummeted to –27.8 per cent, dealing a significant blow to an already vulnerable area of the economy. State-owned enterprises also experienced muted profit performance, reflecting broader structural stress. Companies with investments from Hong Kong, Macau, and Taiwan recorded a modest 3.5 per cent rise in profits, while private firms posted only 1.9 per cent growth, signalling subdued business confidence across the board.
Adding to concerns, US investment giant Morgan Stanley issued a report declaring that the Chinese market remains unstable, warning that corporate performance and profitability were unlikely to improve in the coming year. Across the region, market sentiment remained mixed. Japan’s Nikkei slipped 0.14 per cent, while US stock futures showed little movement. The Dow Jones gained only 10 points, and both the Nasdaq and S&P 500 remained largely flat. US equities were closed the previous day owing to the Thanksgiving holiday.
Economic developments in Japan added another dimension to regional market assessments. Tokyo’s inflation slightly exceeded expectations, rising to 2.8 per cent from 2.7 per cent, prompting speculation that the Bank of Japan may consider raising interest rates. Any monetary tightening by the central bank would have implications for capital flows and regional investment dynamics. On the geopolitical front, Russian President Vladimir Putin issued a firm clarification of his stance regarding the US-proposed Russia–Ukraine peace plan. Putin demanded that Ukrainian forces withdraw from the Donbas region and cede the territory to Russia, asserting that Moscow would otherwise seize the territory through military action.
All eyes on India as GDP data set to reaffirm strong growth
With global markets watching closely, much of the business and investment world turned its attention to India. The Government of India is set to release its second-quarter GDP data for the current financial year (2025–26), covering the July–September period. India had posted a robust 7.8 per cent growth in the April–June quarter, and analysts expect growth to remain at or above 7 per cent, reaffirming the country’s position as the world’s fastest-growing major economy.
The upcoming GDP figure is also being viewed as a measure of India’s ability to weather the impact of President Trump’s recent 50 per cent tariff shock on several Indian products. For the Narendra Modi-led central government, the data will serve as a crucial indicator of economic resilience. The Indian stock market reflected cautious optimism ahead of the data release. After scaling record highs, markets moderated toward the close on Thursday. The Sensex, which surged past 86,000 points for the first time in history, eventually settled at 85,720. Likewise, the Nifty, which touched an all-time high of 26,310, eased to 26,215.
Several global and domestic factors supported the market rally. Expectations of a potential base interest rate cut in the US, developments in the Russia–Ukraine peace process, falling crude oil prices, and the renewed participation of foreign investors all contributed to investor sentiment. Additionally, hopes that the Reserve Bank of India might reduce interest rate pressures in its upcoming December 5 monetary policy review strengthened market confidence. Commodity markets remained steady. Crude oil and gold prices were largely unchanged. In corporate developments, Adani Enterprises is reportedly in advanced talks to acquire a 72.8 per cent stake in Flight Simulation Technique Centre (FSTC), a leading provider of aviation training and pilot-simulation services, for approximately Rs 820 crore. Meanwhile, Bandhan Bank has initiated discussions to auction Rs 6,900 crore worth of non-performing assets (NPAs) as part of its strategy to strengthen its balance sheet.
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