Financial Times

• The European Union is accelerating efforts to finalize its seven-year budget and climate change policies before France holds elections in 2027. • The Financial Times reports that Paris has issued warnings regarding the urgency of securing these key documents. • These agreements determine the long-term funding and environmental regulations that will impact businesses and governments across the EU member states.

• Foreign Portfolio Investors (FPIs) exhibited strong buying activity in the first half of August, marking the fourth consecutive fortnight of inflows into the Indian market. • Investment was primarily concentrated in the financial services, automobiles, and IT sectors, with a notable preference for mid-cap stocks. • Analysts suggest this trend indicates a potential turnaround phase in investor sentiment toward India and a shift toward non-AI allocations.

• Axis Max Life CIO Sachin Bajaj reports that Indian equities are entering a favorable phase driven by recovering earnings, moderate valuations, and strong domestic flows. • Bajaj specifically recommends investing in financials, healthcare, capital goods, digital platforms, and manufacturing beneficiaries, while advising caution regarding overpriced stocks. • Fundamental outlooks have improved as Q1 FY27 earnings growth is exceeding expectations and high-frequency economic indicators signal sustained positive momentum.

• An analysis in The Irish Times warns that the rapid integration of AI could trigger mass deflation, potentially leading to widespread bankruptcies and bank failures within the international financial sector. • The core concern is that a general decline in prices across the board would make it mathematically impossible for debtors to repay the massive amounts of accumulated global debt. • This perspective challenges the current "AI bonanza," questioning whether the surge in investment is a sustainable technological shift or an old-fashioned economic bubble.

• The Monetary Authority of Singapore (MAS) has identified a potential boom in AI investments as a key risk to global financial stability. • To address this, MAS and the Association of Banks in Singapore (ABS) have set up a task force to enhance cyber and technology resilience against AI-driven threats. • The move aims to mitigate potential risks and ensure the stability of the financial system in the face of rapid technological advancements.

• ASEAN's financial landscape is undergoing a strategic reshaping as companies diversify manufacturing locations and investors target fast-growing regional economies. • The region is evolving into a dual-purpose entity, strengthening its position as both a global production hub and a critical financial connector. • Singapore is playing a pivotal role in this shift, serving as a primary coordination point for regional trade, liquidity, and risk management.

• Foreign Portfolio Investors (FPIs) shifted to a buying trend in the Indian financial sector during the second half of June. • FPIs purchased financial stocks worth ₹14,634 crore, reversing a trend from the first half of the month where they sold ₹11,263 crore. • This surge represents record fortnightly inflows, signaling a strong return of foreign confidence in India's financial markets.

• Global financial firms are shifting their Asia-Pacific expansion focus toward South Korea, according to a recent survey conducted by ASIFMA and KPMG. • This strategic pivot is driven by South Korea's regulatory clarity, stable policy environment, and emerging capital market opportunities. • Conversely, firms are adopting a more cautious stance regarding investments in China and India due to operational challenges and geopolitical risks.

• A survey by ASIFMA reveals that two-thirds of 34 global financial firms plan to expand their Asia-Pacific operations over the next three years. • South Korea has emerged as a primary pivot point for growth, while firms express increased caution regarding investments in China and India. • Singapore continues to maintain strong appeal for financial institutions due to its strategic, multipolar geopolitical positioning.

• The South Korean stock market is experiencing an unprecedented "bipolar" trend in 2026, marking it as the most volatile year in history. • Market instability is highlighted by the KOSPI surpassing volatility levels seen during the global financial crisis, with the "sidecar" trading halt triggered 29 times. • Researcher Hyojin Kim of Shin Young Securities notes that such extreme two-way volatility typically signals a major crisis or the bursting of a market bubble.