This week was punctuated with serious outflows, block deals, the kickstart of the results season and a fair degree of drama on X, where Elon Must went on a rant for not getting access to Indian markets. Twiterrati responded promptly with how a lot of global auto manufacturers dont get access to US markets in order to protect Tesla. Was fun to read. More importantly, we veered from extreme caution and heavy selling on Thursday to a beautiful rally in early Friday. Here are the key talking points this week -
Talk of town early on
Much is still unconfirmed about the Irkutsk case, but the latest official picture is calmer than the early reports suggested. A 28-year-old laboratory worker at the Irkutsk Anti-Plague Institute died on 2 October after being hospitalised with severe pneumonia; local media had linked her death to a possible laboratory exposure to plague, and as many as 189 of about 197 identified contacts were placed under medical observation in the eastern Siberian region.
Plague is caused by the zoonotic bacterium Yersinia pestis, usually found in small mammals and their fleas, and it takes several forms: bubonic plague, the classic form associated with the Black Death of the 14th century, can, if untreated, escape the lymphatic system and enter the bloodstream or lungs, producing septicemic or pneumonic plague, according to the WHO.
READ | Russian Plague: Broken Vial Or Deadly Outbreak? Inside The Siberian Lab Death Scare
As of 8 October, Russia's health watchdog Rospotrebnadzor said observation of all contacts had ended, nearly 5,000 laboratory tests had found no dangerous pathogens, and reports of a second case were false. The regional governor said quarantine had been lifted and described the illness as community-acquired pneumonia. Russian authorities have told the WHO that no plague case has been registered in Irkutsk oblast, and the WHO has rated the risk moderate to low locally and very low beyond Russia.
US stocks hit the FOMC Wall
The record-breaking run in stocks that's come despite Treasury yields touching multi-decade highs finally hit a wall. One potential impetus may be caution in the face of rate-hike fears. All 19 Federal Reserve officials backed the decision to raise rates in September amid rising inflation and war-driven oil prices. There's growing belief that a second bump might be on the way. US mortgage rates have also climbed to their highest level in almost three years, compounding the nation's affordability problem.
The contract rate on a 30-year fixed mortgage rose to 7.49% last, its highest point since November 2023, according to Mortgage Bankers Association figures released Wednesday. Add to that, the results and outlook of OpenAI, and one wonders if there could be some gravity for the select band of US stocks which are seeing no selling off late.
READ | Fed Minutes Show Hawkish Unity Behind September Rate Hike
What does PERM suspension means for Indian IT?
The US administration has suspended eight major technology companies from the US PERM programme, raising concerns over green card delays and the future of Indian professionals working in America. However, Nifty IT reacted positively on Friday. Deeper research suggests that Indian IT firms have already sharply reduced fresh H-1B filings, with media reports indicating that registrations by the top six companies fell 92% year-on-year, as firms increasingly rely on local US hiring and offshore delivery.
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT. Fundamentally, a note said thus, "Total 1.48 lakhs perm applications were filled in FY 25 and Indian IT filled only 1841 applications which is 1.24% of total and the average salary is 140K USD. Infosys filled zero perm applications last year and the margin impact of shifting to locals is minimal for Indian IT."
Interesting on oil supply - Kpler
Renewed resilience is being shown by Saudi Arabia's Red Sea crude export system after the East-West Pipeline was disrupted. Around 45 million barrels were confirmed as loaded from Yanbu and Muajjiz between 17 September and 4 October. Imagery captured by satellite on 4 October showed two tankers berthed at Yanbu, while all available berths at Muajjiz were occupied by three tankers. Despite heightened regional security risks, operations have been maintained, and a broader return of alternative routes for Asian buyers is signalled by activity at Egypt's Sidi Kerir.
READ | Hospital Stocks In Focus: Analysts See Limited Earnings Hit From 30% Cancer Drug Margin Cap
Hospitals in focus
The Indian Government has capped trade margins on Cancer drugs at 30% (like in 2019). While the expectation was for a number of around 15%, the 30% number, while higher, is not a very big relief. But the stocks rallied post the announcement because the analyst view is that hospital players can offset this impact by moving across profitability to other parts of the value chain. Keep in mind, the stocks were down double digits in the runup to this decision, and hence a bit of relief rally was anyways anticipated.
Also, when Indian Government had imposed similar margin caps on certain oncology drugs in 2019, the RoCE of hospitals did not change.As we wrap, a small mention of the golddust that Indian cinema lost this week. Nana Patekar's voice carried the weight of the street and the silence of the wounded, in reel life and in real life. In Krantiveer, Salaam Bombay, and across a lifetime of unvarnished roles, he made anger look like truth. He leaves the screen quieter, and Indian cinema poorer, for the fire he took with him. RIP Mr Patekar - wishing you a great afterlife.
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