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Informist, Monday, Oct. 5, 2026

 

By Shruti Nair

 

MUMBAI – Movement in the domestic equity market will continue to be predominantly led by global cues, though September quarter earnings can drive traction in individual stocks. Higher crude oil prices and the rise in global bond yields remain key headwinds in the near-term, according to analysts tracking the market. Prospective regulatory changes in the insurance space are also likely to dampen the sentiment towards the broader banking, financial services, and insurance sector.

 

"Ultimately, for India, what matters is the lower crude oil prices because that is fuelling the entire narrative of higher inflation (and) higher interest rates," Sunny Agrawal, head of research at SBICAPS Securities, said. Agrawal highlighted that the elevated oil prices were already taken into consideration by the Reserve Bank of India during its last bi-monthly policy meeting. The RBI's Monetary Policy Committee is expected to raise the policy repo rate for the first time in over three years on Wednesday amid signs of growing price pressures. Fifteen of the 19 economists and market participants polled by Informist said they expect the panel to hike the repo rate by 25 basis points to 5.50%.

 

Business updates released by banks for the September quarter saw lenders witnessing positive deposit and business growth. Credit growth for private sector lenders in particular was led by leverage lending on the back of Foreign Currency Non-Resident (Bank)-led deposits mobilised, Agrawal highlighted. Lenders, over the past few quarters, faced margin-related challenges due to earlier high-cost deposits while the full effects of repricing were yet to play out, the analyst underscored. However, with most of the repricing phenomenon now behind them, the September quarter would augur well for banks in terms of margin expansion, the analyst opined. Monday, the Nifty PSU Bank index ended 1% higher among the top performing sectoral indices.

 

Despite the positive business updates by lenders, the respite in selling by foreign institutional investors would depend on a fall in crude oil prices, Agrawal opined. "For FIIs, it's a global landscape which is available for them to invest. So now, FII has been chasing AI (artificial intelligence)-related growth stories across the globe since last two years," the analyst said. A shift in the AI narrative hinting at a slowdown, in the vein of comments made by Anthropic's Dario Amodei, could position India as a well-diversified, reasonably-valued option for investors. The analyst also commented on the impact of higher crude oil prices on the Indian rupee, which fell to a low of INR 96.31 against the dollar last week, further deterring participation by FIIs.

 

Nevertheless, the analyst pointed to some positive stock-specific triggers going forward, such as the recent appointment of Anup Bagchi as the managing director and chief executive officer of HDFC Bank Ltd. Further, the initial public offering of conglomerate Reliance Industries Ltd.'s Jio Platforms, expected to be launched by the end of the month, according to sources, could also be a trigger for the benchmark Nifty 50, the analyst said.  End

 

US$1 = INR 96.29

 

Edited by Deepshikha Bhardwaj

 

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