ET NEWS

Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and leaders of eight other nations are set to meet in northern China for the latest summit of the Shanghai Cooperation Organization in a possible challenge to often incoherent approaches by the United States to trade and regional conflicts. The 10-member group that will gather Sunday and Monday in the port city of Tianjin has grown in size and influence over the past 24 years, even while its goals and programs remain murky and name recognition low. Some call it the scariest grouping you have never heard of. The full membership includes Russia, Belarus, China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan. Originally seen as a foil to U.S. influence in Central Asia, the original organization picked up four new members with the addition of India and Pakistan in 2017, Iran in 2023 and Belarus in 2024. Some of those are clear foes of the West, especially Iran and close Russian ally Belarus. Others including India, China and Russia have a more nebulous relationship, either because of Washington's wobbly stance on Russia's war with Ukraine or because of chaos surrounding U.S. tariffs that have upended key trading relationships with countries such as China and India. The SCO's two-day summit may shed more light on issues surrounding the group's activities and intentions. Growing from regional bloc to encompasing alliance Since its 2001 founding, the SCO primarily has been dominated by China, the regional economic superpower, with Russia seeking to use the group to maintain its influence over former Central Asian Soviet republics Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. While Russia's economic influence has declined steadily, especially under increasingly severe Western sanctions, both Russia and China have used the alliance as a framework for regional military cooperation, albeitlimited to joint drills and firing competitions. Belarus, Iran, Pakistan and India joined later in an apparent attempt to share in the SCO's budding influence, though the value of their membership is debatable. Iran and Belarus have faced international condemnation over sanctions and human rights violations, while Pakistan is highly dependent on China for military hardware. India's entry challenges the equation India has long stuck to a self-avowed policy of neutrality, though that may be part of a strategy of self-interest. Since the Russia-Ukraine war began, India has become a major buyer of Russian oil, increasing tensions with Washington. Modi also remarked on "steady progress" in improving relations with China after meeting its top diplomat in August and noted "respect for each other's interests and sensitiveness.'' India's SCO entry potentially challenges Russian and Chinese domination over the association. Despite their trade ties, India is unlikely to offer meaningful support for Russia's war in Ukraine or China's claims to Taiwan and the South China Sea. India has also long sought a permanent seat on the United Nations Security Council but has received only tepid back from China and Russia, possibly to prevent their influence with the West from being diluted. Still, New Delhi stands to lose little as long as Washington continues to broadcast uncertainty with its foreign trade. India has said it will not sign a joint statement with the SCO because it sees a pro-Pakistan stance in the omission of a mention of a deadly April 22 terror attack on tourists in Indian-controlled Kashmir. Yet expectations have not been high for India to sign. Little ventured and little to lose for China Beijing has given few hints of what solid progress it expects from the summit, which is in keeping with the secretive nature of its diplomacy and politics. The official Xinhua News Agency on Monday called the gathering the "largest-ever SCO summit in history" and said it would be used for "charting the blueprint for the bloc's next decade of development." The leaders of about a dozen other countries are joining the summit as SCO dialogue partners or guests, including Egypt, Nepal and several Southeast Asian nations. Xinhua spoke of the organization being guided by the "Shanghai Spirit, which features mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development." Citing growing trade and rail freight between China and other members, observer states and dialogue partners, Beijing seems eager to emphasize the bloc's economic benefits. Xinhua noted documents would be signed including a notice of the 80th anniversary of the end of World War II, which the ruling Communist Party will mark with a military parade in central Beijing on Sept. 3. Group showcases Xi Jinping's multipolarity vision University of Chicago political scientist Dali Yang said the SCO is one of the most prominent regional organizations China has cofounded. "For China's leadership, there is a lot of emphasis on maintaining existing relations in the international arena even though the SCO has not been effective in dealing with the major challenges of today," Yang said. The summit comes just days before a massive military parade through Beijing marking the 80th anniversary of Japan's surrender at the end of WWII attended by Xi and other leaders, including a rare showing by North Korea's Kim Jong Un, Yang said. The SCO seems to show a desire to move from a dialogue platform to a "full-fledged mechanism of practical cooperation that brings tangible results to the citizens of the member states," said June Teufel Dreyer, a University of Miami expert on Chinese politics. Yet the questions remain, "to what end and how?" For Xi, "presiding over the gathering in Tianjin should net him some favorable publicity and possibly further his image as leader of a new global world order," Dreyer said.

India saw its first fall in travel to the US in June 2025 compared to the previous year, breaking a two-decade trend. According to a report by the US Commerce Department’s National Travel and Tourism Office (NTTO), data shows 2.1 lakh Indians visited the US in June, down 8% from 2.3 lakh in June 2024. Provisional figures for July indicate a 5.5% year-on-year drop.The decline is not limited to India. As per the NTTO data, overall international visitor arrivals to the US fell 6.2% in June 2025 compared with the same month last year. Similar decreases were seen in May (7%), March (8%) and February (1.9%), while January and April recorded small gains of 4.7% and 1.3% respectively.India remains the fourth largest source market for US travel. Since Mexico and Canada share land borders with the US, India is the second largest overseas source market after the UK. Together with Brazil, these five markets made up nearly 60% of total international arrivals in June, NTTO reported. Month 2024 2025 Change (%) January 169,087 173,934 +2.9 February 117,122 115,006 -1.8 March 157,834 152,105 -3.7 April 175,211 176,535 +0.7 May 263,150 263,108 Almost same June 233,149 214,345 -8.0 July 198,205 187,219 -5.5 According to a report by the Times of India, tourism industry experts warn against linking the dip solely to the visa policies under President Trump’s second term. A leading travel agent said, “We are seeing a very visible impact on the student segment this year due to delay in visa issuance even after people securing college admission.” He added that visiting friends and relatives, business, and students remain the top travel categories, while leisure travel to the US has historically lagged behind Southeast Asia, the Middle East and Europe.The US has a large Indian diaspora of over 50 lakh, keeping demand for travel high. However, few experts have noted that factors like delayed visa appointments and stricter issuance rules could affect future travel, especially as many Indians currently rely on 10-year multiple-entry visas already in hand.Travel from India to western destinations was also hit by other recent developments, including the Pahalgam terror attack, closure of Pakistan’s airspace, and the Air India Ahmedabad crash. “Every destination, especially in the west, was impacted badly. The drop to the US may not be in isolation,” another travel executive said.According to India’s tourism ministry, outbound travel in April 2025 was strong, with 29 lakh Indians travelling abroad. The UAE, Saudi Arabia, Thailand, Singapore and the US were the top five destinations that month.(With inputs from TOI)

Indian equities closed out August with a second straight month of losses, as the Nifty fell 1.38% in a holiday-shortened month and recorded its weakest two-month stretch since early 2023. The benchmark index has been weighed down by U.S. tariff shocks, foreign fund outflows, and profit-taking across key sectors. Investors now face a pivotal week that could test whether strong domestic growth, tax reform talks, and a diplomatic reset with China can revive sentiment.The Nifty 50 and Sensex each lost more than 2.2% last week, dragged lower by U.S. tariffs on Indian goods. The United on August 27 doubled duties to 50% in response to India’s purchases of Russian oil, stoking fears of stress in export-heavy industries from textiles to metals and auto.“Indian equities ended lower this week as early optimism was overshadowed by sustained selling amid rising global and domestic headwinds,” said Vinod Nair, head of research at Geojit Investments. He noted that “the subsequent imposition of tariffs on Indian goods further dented confidence, driving profit booking across sectors. Large caps declined, while mid- and small caps saw sharper losses on stretched valuations and heightened uncertainty.”Foreign portfolio investors pulled about Rs 527 billion from equities in July and August, extending outflows from muted earnings and tariff-related risks. Brokerage Emkay Global said the direct GDP hit from tariffs could be limited to about 0.5% of FY26, but warned of “significant second-order risks to asset quality and employment.”GDP resilience offers a bufferIndia’s economy, however, showed unexpected strength in the June quarter. GDP grew 7.8% year-on-year, well above the 6.7% consensus estimate and higher than the 7.4% expansion in the prior quarter, BofA Securities noted.“GDP growth of 7.8% for the first quarter of FY26 is encouraging and reconfirms the resilience of the Indian economy in the face of ongoing tariff turmoil and regional wars,” said Ashwini Shami, president and chief portfolio manager at OmniScience Capital.Shami pointed to services growth of 9.3% and a 9.7% jump in government spending as key drivers, while private consumption rose 7%. “The expected pick up in domestic consumption, private sector capex growth and sustained growth in fixed capital formation shall provide sustained economic growth which is a strong positive for the equity markets,” she said.BofA said the strong print “has all but ruled out a rate cut in October,” while maintaining its FY26 GDP forecast at 6.5% due to global risks from tariffs and trade disruptions.GST Council meeting in focusAttention now turns to the September 3-4 meeting of the GST Council, where Finance Minister Nirmala Sitharaman will chair discussions on rationalising the tax regime. Markets are betting that a three-tier structure could emerge, with consumption and auto sectors seen as top beneficiaries.“The next trigger is GST 2.0, with the final contours expected on 5-Sep-25: we see this as a major growth catalyst,” Emkay Global said, reaffirming its Nifty target of 28,000 for September 2026.Nair of Geojit Investments said consumption-driven sectors—“FMCG, Durables, Discretionary, Cement, and Infrastructure”—remain well positioned to benefit from GST cuts and higher government spending.Modi visits ChinaAdding a geopolitical dimension, Prime Minister Narendra Modi met Chinese President Xi Jinping in Beijing on Sunday in his first visit to China in seven years, on the sidelines of the Shanghai Cooperation Organisation summit.“We are committed to progressing our relations based on mutual respect, trust and sensitivities,” Modi told Xi, according to a clip posted on his official X account.The meeting comes just days after Washington imposed punishing tariffs, with analysts noting that Modi and Xi are seeking to present a united front against Western pressure.OutlookMarket watchers expect volatility to persist in the near term, with domestic growth triggers offset by external headwinds. “A resolution of tariff disputes could act as a key catalyst for market sentiment, although the reciprocal 25% tariff is expected to remain in place in the near to medium term,” said Nair of Geojit Investments.Whether robust GDP growth, fiscal reforms, and geopolitical thawing can outweigh trade risks will be tested when markets reopen in September. For now, Nifty’s slide has left investors weighing whether the domestic resilience story can overcome global turbulence.Also read | Rs 35,000 crore FII selloff in August. Can GST reforms, tariff relief and a strong GDP print turn the tide?(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

September seasonality leans bearish, with the Nifty closing lower in 6 of the last 10 years, largely driven by foreign capital outflows as FIIs turned net sellers on as many occasions.The 50-stock index settled lower in 2015, 2016, 2017, 2018, 2020, and 2022. The sharpest fall of 6.4% was recorded in 2018, followed by a 3.7% decline in 2022. In 2016, Nifty fell nearly 2%, while 2015 saw a modest 0.3% decrease. In 2019, 2021, 2023, and 2024, Nifty closed positive, rising by 4%, 2.8%, 2%, and 2.3%, respectively. <iframe title="Nifty in September: Last 10 years" aria-label="Bar Chart" id="datawrapper-chart-PI0hG" src="https://et-infographics.indiatimes.com/graphs/PI0hG/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="458" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}})}();</script>FII/DII dataFIIs booked gains and were net sellers on six occasions in September, while they infused funds on four other occasions. They were net sellers in 2015 (-Rs 6,475.15 crore), 2017 (-Rs 11,392.27 crore), 2018 (-Rs 10,824.7 crore), 2020 (-Rs 7,782.53 crore), 2022 (-Rs 7,623.66 crore), and 2023 (-Rs 14,767.5 crore). Meanwhile, FIIs were net buyers in 2016 (Rs 10,443.25 crore), 2019 (Rs 7,547.89 crore), 2021 (Rs 13,153.69 crore), and 2024 (Rs 57,723.64 crore). <iframe title="FII/DII action of last 10 Septembers" aria-label="Grouped Bars" id="datawrapper-chart-RINMG" src="https://et-infographics.indiatimes.com/graphs/RINMG/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="599" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}})}();</script>Notwithstanding the FII sentiment, domestic institutional investors (DIIs) have been net buyers in September every year. The highest buying was recorded in 2024, when DIIs purchased equities worth Rs 31,860 crore. The next strongest buying months were in 2017 and 2014, with DIIs acquiring shares worth Rs 21,026 crore and Rs 14,220 crore, respectively. In 2018 and 2019, DIIs bought shares valued at nearly Rs 12,500 crore each (2019: Rs 12,490.81 crore).The September series started on Friday, August 29, with the Nifty closing 0.3% lower at 24,426.85. The Nifty index fell 1.7% during August amid heightened FII selling, as Rs 34,993 crore worth of Indian equities were offloaded.“FIIs were unequivocally bearish -- net sellers of Rs 38,590 crore in cash -- and maintained a negative bias in index futures, while being marginal buyers in stock futures. Despite the index weakness, India VIX hovered near 52-week lows, underscoring complacency or lack of aggressive downside hedging,” Yes Securities noted.Taking an 18-year view, Sudeep Shah - Vice President and Head of Technical and Derivative Research Desk at SBI Securities observed that Nifty’s performance in September has been mixed. On 10 occasions, the index closed positive with an average gain of 6.78%, while on 8 occasions, it ended negative with an average loss of 2.65%. The average return for the Nifty in September has been 2.6%. Additionally, September has consistently shown an average volatility of 9% for the Nifty index, Shah said.Based on rollover data from August, potential outperforming sectors could include automobiles, consumer durables, and FMCG. Potential underperforming sectors are likely to be private banks, financial services, defense, oil & gas, media, PSE, CPSE, capital markets, and realty, the VP said.Technical viewCurrently, the index is trading below its 20-, 50-, and 100-day EMA levels, and the daily RSI is below its 9-day average, nearing a slip below the 40 mark, SBI Securities analyst noted. “Going ahead, the 200-day EMA zone of 24,300–24,250 will act as an important support for the index. Any sustainable move below 24,250 may lead to further correction toward the 24,000 level,” he warned.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)