Analysts note that the stock market movement this week will be determined by several factors, including the Reserve Bank of India's monetary policy decision, TCS company reports, crude oil prices, and global bond yield indicators. Furthermore, market trends will be guided by macroeconomic data announcements and foreign investor activity.
Particular attention will be paid to the RBI's monetary policy meeting, as its stance, inflation forecasts, and growth rates will provide important benchmarks regarding the short-term direction of domestic interest rates and financial markets. This week will also mark the start of the earnings season, with index heavyweight TCS and retail giant DMart among the key companies expected to publish results.
Regarding economic data, the final figures for India's September services PMI and composite PMI are scheduled for release on October 6. Moreover, TCS is set to present its third-quarter results on October 8.
Crude Oil and Bond Issues
Crude oil remains the most pressing macroeconomic concern. Trading of Brent crude above $100 per barrel continues to put pressure on India's external balances and inflation forecast. Meanwhile, persistent geopolitical uncertainty threatens to maintain a high risk premium in energy prices, noted Ponmudi R, CEO of Enrich Money.
Global bond yields will be another important indicator of risk appetite. According to Ponmudi, a slowdown in the rise of US Treasury yields could reduce pressure on emerging market assets and foster a more constructive environment for foreign capital inflow. Conversely, further yield increases could enhance the attractiveness of American assets and stimulate portfolio reallocation away from emerging markets.
Previously, Indian stocks ended their eighth consecutive week of decline as sentiment was dampened by selling from foreign investors, rupee depreciation, high crude oil prices, and rising global bond yields. Last week, the Sensex index fell by 1986.04 points, or 2.68 percent, while Nifty dropped by 718.55 points, or 3.10 percent. In September, the BSE benchmark lost 4476.98 points, or 5.81 percent, and Nifty declined by 1459.95 points, or 6 percent.
Hariselvan Radhakrishnan, founder and CEO of HST Wealth, believes that the RBI's decision will be the main domestic trigger. Following this, the minutes from the US Federal Open Market Committee (FOMC) meeting will provide information on the extent of support from American politicians for further monetary tightening after the rate hike in September.