The Morning Edge: FDI Into Europe Falls To 9-Year Low As Investor Caution Grows

QUICK SNAPSHOT
Global Sentiment: Risk-on
Factors: Tariff Tension Easing

TODAY’S WATCHLIST
 - India Merchandise Trade Data for April 
 - Fed Chair Powell Speak

THE BIG STORY
Foreign direct investment into Europe declined for the second straight year in 2024, hitting a nine-year low, according to EY’s latest survey—a sobering sign of investor unease across the continent. FDI dropped by 5%, with Germany bearing the brunt of the downturn, posting a 17% fall in project numbers despite a surprising 35% rise in associated jobs. Companies pointed to a cocktail of economic stagnation, persistently high energy costs, and geopolitical volatility as the primary deterrents to capital deployment. Particularly striking was the 11% year-on-year drop in US-originated projects, as a more favourable economic climate in the US drew investors back across the Atlantic.

Amid these headwinds, a notable shift is underway: Europe is increasingly investing. EY’s data reveals that since 2015, the share of intra-European investment has grown by five percentage points, suggesting a strategic pivot toward regional resilience. Julie Teigland, EY’s EMEIA Area Managing Partner, underscored this trend, stating that “over 60% of our investment comes from Europe for Europe,” while US investment now accounts for just 18%. As Europe navigates this evolving landscape, the balance between foreign reliance and internal reinvestment could define the continent’s economic trajectory for years to come.

DATA
US crude oil inventories unexpectedly rose by 3.454 million barrels for the week ending May 9, 2025, defying forecasts of a 1-million-barrel draw, according to the EIA Petroleum Status Report. Meanwhile, stockpiles at the Cushing, Oklahoma delivery hub dropped by 1.069 million barrels. Refined fuel inventories also declined, with gasoline down 1.022 million barrels and distillate fuels falling by 3.155 million barrels.

WHAT HAPPENED OVERNIGHT
US stocks ended slightly higher on Wednesday, swinging between gains and losses in a muted session as investors awaited fresh economic data following a rally earlier in the week driven by soft inflation figures and a US-China tariff truce. Communications services led sector gains with a 1.6% rise, while tech added 0.96%, helped by AI-related deals in the Middle East. Nvidia and AMD were among the top performers, gaining over 4% each, with AMD announcing a $6 billion share buyback. Boeing edged up 0.6% after Qatar Airways signed a jet purchase deal during President Trump’s Gulf tour.

Yields on US Treasuries climbed on Wednesday, with the 10-year note rising above 4.5%—its highest level since February—as improved trade flows and easing tariff tensions boosted growth expectations. A temporary 90-day reduction in tariffs by both the US and China lifted investor sentiment and triggered a sharp rebound in long-dated yields. As a result, rate traders scaled back expectations for Fed rate cuts this year, now pricing in two reductions by December instead of four, despite softer-than-expected April CPI data. 

The US dollar extended modest gains on Wednesday, rising 0.14% against a basket of major currencies, despite continued economic and policy uncertainty. A Bank of America survey revealed that global asset managers held their largest underweight position in the dollar in 19 years, reflecting weak sentiment due to Trump's trade policies.

Brent crude oil eased on Wednesday after government data revealed a surprise build in US crude inventories, sparking concerns about oversupply. The benchmarks fell after the Energy Information Administration reported that crude stockpiles rose by 3.5 million barrels to 441.8 million last week, while analysts polled by Reuters had expected a 1.1-million-barrel draw. 

Day’s Ledger

Economic Data:

• India Automobile Sales for April
• India Merchandise Trade Data for April
• UK GDP Estimates for Jan-Mar quarter
• UK Trade Data for March
• IEA to Release Oil Market Report for May
• EU Industrial Production for March
• EU GDP Estimate for Jan-Mar
• US April Core PPI data
• US April Industrial Production 
• US weekly Initial Jobless Claims data

Corporate Actions:

• Jan-Mar earnings: Abbott India, Alivus Life Sciences, Balrampur Chini Mills, BLS International Services, Bikaji Foods International, Bombay Burmah Trading Corporation, Caplin Point Laboratories, CESC, Cochin Shipyard, Crompton Greaves Consumer Electrical, Endurance Technologies, Global Health, Godfrey Phillips India, Godrej Industries, Gujarat Mineral Development Corporation, Inox India, Inventurus Knowledge Solutions, IFCI, JSW Energy, Jupiter Wagons, Kaynes Technology India, LIC Housing Finance, LT Foods, Neuland Laboratories, NCC, Page Industries, Patanjali Foods, PB Fintech, Saregama India, SignatureGlobal India, SKF India, Tube Investments of India Ltd, ZF Commercial Vehicle Control Systems India.
• Aplab to consider rights issue
• Balmer Lawrie to consider dividend, bonus shares and buy back
• Bio Green to consider rights issue of equity shares
• Himalaya Food to consider rights issue of equity shares
• InfoBeans Technologies to consider buy back of shares
• Iris Clothings to consider issue of bonus shares
• Paisalo Digital to consider raising of fund

Policy Events:

• Fed Chair Powell Speak
• ECB's Elderson Speaks
• ECB's De Guindos Speaks

TICKERS

• ANGEL ONE to transfer key businesses to subsidiary
• APOLLO TYRES' Jan-Mar PAT declines due to high input costs and low sales.
• BRIGADE ENTERPRISES buys 5.41-acre land parcel in Chennai for residential project.
• EDELWEISS FINANCIAL's PAT drops 38% YoY due to a shrinking capital business.
• EICHER MOTORS logs record earnings in March quarter on strong vehicle sales
• HUL gets regulatory nod for Kwality Wall’s demerger
• IREDA files application against Gensol Engineering
• JUBILANT FOOD's PAT jumps 93% YoY after 10 consecutive quarters of decline.
• KARNATAKA BANK's Jan-Mar PAT drops 8% YoY due to rising expenses.
• KIRLOSKAR BROTHERS has appointed Bhavesh Chheda as its new CFO, effective Wednesday.
• MUTHOOT FINANCE's Jan-Mar PAT rises as gold loans surge.
• SBI to raise up to $3 billion in long-term funds
• SHREE CEMENT's PAT falls as higher expenses and tax spending take a toll.
• TATA POWER’s Jan-Mar consolidated PAT rises 16.5% YoY to ₹10.43 billion.
• TORRENT POWER’s Jan-Mar PAT more than doubles, driven by a tax reversal.
• WIPRO partners with Hachette UK for IT transformation via SAP S/4HANA.

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• India's wholesale inflation drops sharply to 0.85% in April on fuel prices
• India's edible oil stocks fall to five-year low on weak palm oil imports
• Cabinet approves HCL-Foxconn joint venture under semiconductor mission
• SEBI bars Varyaa Creations, freezes promoters' shares over IPO misuse
• OPEC expects slower 2025 oil supply growth from rivals after price drop
• US-China tariff truce may not hit Apple India's smartphone plans
• China halts some non-tariff curbs after US talks
• Boeing inks record-breaking deal for Qatar Airways to buy up to 210 planes
• EU antitrust regulators to accept Microsoft’s Office-Teams offer
• India's wholesale inflation drops sharply to 0.85% in April on fuel prices
• India's edible oil stocks fall to five-year low on weak palm oil imports
• Cabinet approves HCL-Foxconn joint venture under semiconductor mission
• SEBI bars Varyaa Creations, freezes promoters' shares over IPO misuse
• OPEC expects slower 2025 oil supply growth from rivals after price drop
• US-China tariff truce may not hit Apple India's smartphone plans
• China halts some non-tariff curbs after US talks
• Boeing inks record-breaking deal for Qatar Airways to buy up to 210 planes
• EU antitrust regulators to accept Microsoft’s Office-Teams offer