RBI rate decision, earnings, oil & more: Here's what will drive stock market this week
Volatility looms over Indian stock markets as they navigate a complex web of local and global influences. Major factors at play include the upcoming decision on interest rates from the Reserve Bank of India, alongside the eagerly awaited corporate earnings announcements. Additionally, fluctuations in crude oil pricing and global bond yields are expected to mold market sentiment.
Indian stock markets are braced for a potentially volatile week, with a confluence of domestic and international factors expected to steer the course of equities. The Reserve Bank of India's (RBI) interest rate decision, the kickoff of the earnings season, crude oil prices and global bond yields will be among the key market-moving elements investors will be monitoring.
The RBI's monetary policy decision will undoubtedly be the foremost domestic event. Investors will be keenly observing the central bank's policy stance, inflation outlook and growth projections, which could serve as clues for the direction of domestic interest rates and financial markets. Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, stated, "The RBI’s policy decision will be the principal domestic trigger.
The US Federal Open Market Committee (FOMC) minutes will subsequently offer insights into the extent of support among US policymakers for further monetary tightening beyond the September rate increase."
The week will also usher in the start of the September-quarter earnings season for Indian companies. IT giant TCS is expected to unveil its financial results on October 8, while retail behemoth DMart is among the key firms slated to report earnings. Ajit Mishra, SVP – Research at Religare Broking, remarked, "RBI’s monetary policy meeting will be closely watched.
The policy stance, inflation outlook and growth projections will provide important cues on the near-term trajectory of domestic interest rates and financial markets."
Macroeconomic factors on the horizon include India's final HSBC Services PMI and Composite PMI readings for September, slated for release on October 6. The levels of Foreign Institutional Investors (FIIs) trading activity will also remain a significant determinant for the market.
Crude oil prices, especially the soaring Brent crude trading above USD 100 a barrel, constitute a major concern. Elevated oil prices could exacerbate pressure on India's external balances and inflation outlook, while persistent geopolitical uncertainties could maintain a high risk premium in energy prices. Ponmudi R, CEO of Enrich Money, noted, "Crude oil remains the most immediate macroeconomic concern.
Brent crude trading above USD 100 a barrel continues to intensify pressure on India’s external balances and inflation outlook, while persistent geopolitical uncertainty threatens to keep the risk premium in energy prices elevated."
Global bond yields will also be scrutinized for their influence on risk appetite and foreign flows. A softening of US Treasury yields might alleviate pressure on emerging-market assets, while a further rise could render US assets relatively more appealing and precipitate continued portfolio reallocation away from emerging markets, according to Ponmudi.
The domestic market opens the week after a two-week streak of declines, battered by foreign selling, a weakening rupee, elevated crude prices and rising global bond yields. The Sensex suffered a 1,986.04-point, or 2.68 percent, fall last week, while the Nifty dropped 718.55 points, or 3.10 percent. In September, the Sensex tumbled 4,476.98 points, or 5.81 percent, and the Nifty declined 1,459.95 points, or 6 percent.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
