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RBI Decision, Oil Prices and TCS Results Test Markets
Indian share prices have fallen for eight weeks in a row.
Investors are watching to see whether the Reserve Bank of India raises interest rates.
Many economists expect a small increase, partly because prices have been rising and oil is expensive.
Higher rates can make borrowing costlier and affect how investors use their money.
Investors are also concerned about high global bond yields and foreign investors selling Indian shares.
The US central bank's meeting notes may offer clues about its future plans.
Companies are beginning to report their latest results, including Tata Consultancy Services.
Those results could help show whether businesses are earning more and whether customers are spending again.
Indian equities recorded an eighth straight weekly decline, with the Sensex down 2.68% and the Nifty down 3.10% last week.
A majority of economists and bankers polled expect the RBI to raise its repo rate by 25 basis points to 5.50% at its October 7 decision.
Inflation rose to 4.82% in August, while crude prices above $100 a barrel and higher global bond yields added to market concerns.
Foreign portfolio investors sold more than Rs 25,000 crore of Indian equities in September, according to the article.
Tata Consultancy Services and DMart are due to report results this week, as investors look for signs of stronger corporate earnings.
- Who
- Indian equity investors, the Reserve Bank of India and companies reporting results, including Tata Consultancy Services and DMart.
- What
- Markets face a closely watched RBI policy decision and corporate earnings season amid falling share prices, high crude prices and global bond-yield concerns.
- Where
- India, with global financial conditions also affecting investor sentiment.
- When
- The RBI meeting is scheduled for October 5–7, with its decision due Wednesday; TCS results are scheduled for October 8.
- Why
- Investors are assessing whether inflation and expensive crude will prompt tighter monetary policy, alongside foreign selling, global bond yields and corporate earnings.
Tighter policy
Cautious or unchanged policy
Whether to raise rates
Tighter policy
A majority of economists and bankers polled expect a 25-basis-point hike, citing rising inflation, high energy prices and tighter global monetary policy.
Cautious or unchanged policy
Some economists expect no change; the article says views range from holding rates to calibrated tightening and withdrawal of accommodation.
Growth and inflation outlook
Tighter policy
Higher crude prices and recent inflation pressures could warrant an upward revision to the inflation forecast and a more hawkish stance.
Cautious or unchanged policy
Some economists expect the RBI to raise its growth projection because activity has been stronger than anticipated; Radhika Rao expects it to move above 7%.
Key facts
- RBI meeting
- October 5–7; decision due Wednesday
- Expected repo rate
- A majority of economists and bankers polled expect a 25-basis-point increase to 5.50%.
- August retail inflation
- 4.82%, up from 4.45% in July
- Crude oil
- Prices remained above $100 a barrel.
- Weekly market performance
- Sensex fell 2.68%; Nifty fell 3.10%.
- Foreign equity outflows
- Foreign portfolio investors sold more than Rs 25,000 crore of Indian equities in September.
- TCS results
- Scheduled for October 8.
Sources
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