International News 11/06

June 11, 2024 No. 91

The outcome of the Indian election has caused significant volatility in the stock market.

Narendra Modi's victory in the Indian elections caused chaos in the country's capital markets. BJP won more seats than expected. The BJP-led National Democratic Alliance got 292 seats in the parliament, enough to form a government. But it fell short of the party's target of 400 seats. Foreign investors sold Indian stocks, making around Rp 24.32 trillion in foreign sales. India's stock index fell 6% but recovered slightly on Wednesday. The market reacted to concerns over the slow pace of reforms under the BJP-led government. Investors reassessed the future.

The European Central Bank (ECB) has cut interest rates for the first time since 2019.

The European Central Bank (ECB) has lowered its benchmark interest rate for the first time since 2019, citing progress in its fight against high inflation. However, the ECB also noted that the fight against inflation is not yet won, as inflation is expected to remain high until next year. The inflation rate in the eurozone has fallen from over 10% to slightly above the ECB's target of 2% in recent months. This is mainly due to lower fuel costs and supply normalisation. However, progress in reducing inflation has recently stalled, raising uncertainty about the ECB's easing cycle. In response, the ECB has reduced its deposit rate to 3.75% from 4.0%, while also raising its inflation forecasts for this year and next. The bank has stated that further rate cuts will depend on the outcome of future data. It has also indicated that borrowing costs should remain high enough to control prices.


Nvidia overtakes Apple: Market capitalisation reaches $3 trillion.

Nvidia Corp has become the first computer chip company to reach a market capitalisation of $3 trillion, overtaking Apple. The company's shares have soared 147% this year, driven by rising demand for chips used in artificial intelligence tasks. On Wednesday, Nvidia's share price rose 5.2%, pushing its market value past $3 trillion and overtaking Apple's market capitalisation. This is the first time since 2002 that Nvidia has surpassed Apple's market capitalisation. Nvidia CEO Jensen Huang said the company plans to increase the number of AI accelerators every year. The rise of generative AI is seen as a new industrial revolution, and Nvidia expects to play a significant role as these technologies become more prevalent in personal computers. The rise in Nvidia's share price also boosted Huang's fortune to $107.4 billion.