Finimize - 🇮🇳 India beat China

What’s going on here?

The value of Swiss watch exports ticked up by nearly 7% in August from a year earlier, despite plenty of buyers ditching life’s little luxuries.

What does this mean?

Swiss watchmakers are the crème de la crème, so their order books indicate how much folk are willing to spend on nice-to-haves. And August’s uptick might, on the surface, look good for retailers. Thing is, lavish sales of high-end timepieces made up for a decline in demand for cheaper ones, suggesting that it’s only the wealthiest shoppers flashing the plastic. Sales of watches with a wholesale price higher than 3,000 francs (about $3,500) rose 5% by volume and 15% by value, while those of cheaper ones fell 14% by value and 11% by volume.

Why should I care?

For markets: Budgets aren’t for everyone.

China is the second-biggest buyer of luxury watches. But with its economy on ice, the country spent 6% less on Swiss watches this August than last. That’s a common trend right now: plenty of luxury brands have suffered as shoppers in China – usually reliable buyers of fancy garms and gadgets – have tightened their budgets. And yet, the world’s wealthiest shoppers are still frequenting the most exclusive luxury brands. Just look at Ferrari: sales have stuck around, and the carmaker’s share price is hovering near a record high.

The bigger picture: The rich get richer.

Many countries have seen their populations divided in the last couple of years. The very richest have made bank from high interest rates on well-fed savings accounts and benefited from the near-record highs of global stock markets. Meanwhile, others are holding down two jobs just to pay the bills. But interest rate cuts across Europe and the US could be a tiny leveler: they’ll make it cheaper to borrow money and pay back debt, helping folk afford some of life’s finer things.

What’s going on here?

India overtook China in one of the world’s biggest stock market indexes, after investors backed the furious speed of the Indian economy over China’s more tepid performance.

What does this mean?

India’s economy is expanding at the fastest pace in the world. That’s made the country’s stocks look irresistible to investors around the globe. And all that attention has given the Indian stock market a push: the country’s Nifty 50 index – which tracks, as the name suggests, the 50 biggest companies in India – has picked up by 17% this year to hit a record high. Meanwhile, the Shanghai Composite is down 8%. So now, India accounts for 2.3% of the MSCI All-Country World Index, which tracks stocks from both emerging and developed markets. That trumps China’s 2% and makes India the sixth-biggest player in an index dominated by US stocks.

Why should I care?

For markets: The public eye.

Indian companies are taking advantage of the stock market’s buzz, with companies like Ola Electric and Bajaj Housing Finance making their public market debuts. They’re leading a serious pack: Indian companies accounted for a quarter of the world’s total number of initial public offerings (IPOs) in the first half of this year. What’s more, the country has raised over $12 billion via IPOs this year so far – more than double the figure from the same time last year. And with over 5,450 listed companies, India now boasts the most in the world.

The bigger picture: All that glitters ain’t gold.

Established Indian stocks are now so expensive that investors are hunting for comparatively cheaper opportunities. And recently, fresh public listings have fit that brief, so folk are piling in. Case in point: this year, newly public Indian companies have seen their stocks pick up by an average of 30% on day one of trading. But there’s reason to be cautious: a recent study showed that most retail investors went on to cash out within a week.