RBI Monetary Policy Decision, TCS Kicks Off Q2 Earnings Season, US Inflation Data: The Week Ahead

India has a busy week ahead as it begins its second quarter earnings season and the Reserve Bank of India's Monetary Policy Committee convenes to determine key policy rates.

Tata Consultancy Services Ltd. (TCS) will announce its earnings for the second quarter of fiscal 2025 on Thursday. Economists are forecasting that the RBI is shifting from a hawkish to a neutral stance. Following the US Federal Reserve's jumbo 50 basis points rate cut, the consensus is split between a hold on rates and a 25 basis point cut.

Indian primary markets will see the initial public offering of Garuda Construction and Engineering Ltd. Hyundai Motor India Pvt. is expected to announce the date for its IPO issue—touted to be the country's largest IPO of the year.

In the US, September CPI data and Federal Reserve meeting minutes will be released. The minutes will reveal the consensus behind the 50 basis-point rate cut and provide insight into the Fed's labour market outlook and economic risks.

In the Asia-Pacific region, central banks in South Korea and New Zealand will announce policy decisions next week, and Samsung Electronics Co. will release its earnings.

Markets Last Week

Benchmark equity indices recorded their worst week in over two years amid rising tensions in the middle east. Globally, the markets await US payrolls data for the month of September.

Both Nifty and Sensex fell more than 4% this week, logging their worst fall since the week ended June 13 of 2022. Top losers of the Nifty this week were Hero MotoCorp Ltd., Shriram Finance Ltd., and Axis Bank Ltd.

Friday's session was volatile as the benchmarks saw big swings from 1% intraday rise to a fall of 1%. The Nifty closed 0.79%, or 200.25 points lower at 25,049.85 and the Sensex was down 808.65 points or 0.98% at 81,688.45.

On BSE, 19 out of 20 sectors declined with the BSE FMCG emerging as the top loser. The BSE IT was the only sector which rose.

Domestic Cues

India is set to have a happening week ahead, with the RBI's repo rate decision on Wednesday at 12:30 p.m. and the release of industrial production data for August on Friday at 8 p.m.

The country will also kick off second quarter earnings season with tech giant Tata Consultancy Services Ltd. (TCS) set to announce its results on Thursday. Hathway Bhawani Cabletel & Datacom Ltd., Indian Renewable Energy Development Agency Ltd. and Tata Elxsi Ltd. will be the other big names declaring their September quarter results next week.

The Monetary Policy Committee will meet for its first key meeting after appointing three new external members. The consensus expects the RBI to maintain its stance in October, but Bloomberg anticipates a 25 basis point rate cut, shifting from a hawkish to a neutral stance. Reasons include lower-than-expected growth, inflation dropping below target, and a recent US Federal Reserve rate cut. Only three out of 13 economists in a Bloomberg poll expect a rate cut, with the majority predicting a hold.

Industrial production growth in August is likely to have slowed to 0.8% year-on-year from 4.8% in July, driven by weaker exports and high capital costs. Data will be out on Friday.

Global Cues

In the US, the September Consumer Price Index is expected to show further progress toward the Federal Reserve's 2% target, with a projected 0.1% monthly increase and a slowdown in YoY inflation to 2.3%.

The Federal Open Market Committee minutes, due Wednesday, will provide insight into the degree of consensus behind September's 50 basis-point rate cut, which exceeded many expectations. The minutes may also shed light on the Fed's outlook for the labour market and risks to the economy.

Canada's labour market data, expected on Friday is likely to show modest job growth of 25,000 in September, although hiring has been volatile. Bloomberg expects easing wage pressures and increased downside inflation risk, which could prompt faster rate cuts by the Bank of Canada.

In the Asia-Pacific region, central banks in South Korea, New Zealand, and India will announce policy decisions next week. The Reserve Bank of New Zealand is expected to deliver a 50 basis-point rate cut to counter economic deterioration, while the Bank of Korea may reduce its base rate by 25 basis points, amid weak demand and below-target inflation.

Samsung Electronics Co.'s earnings, which will be out on Tuesday, should provide insights into the state of the South Korean technology sector, particularly in the AI space.

China's aggregate financing data for September, due between Oct. 9-15, is expected to reflect increased government funding and seasonal support, with 3.5 trillion yuan in new financing, up from 3.0 trillion yuan in August. However, private-sector credit demand remains weak, with corporate financing likely declining on a yearly basis.

Japanese Retailers—Uniqlo and 7-Eleven—will announce their earnings and the results will provide insights into the local consumer sector.

Additionally, inflation data will be released from Russia, Mexico, Brazil, Argentina, Colombia, and Chile.

Primary Market Action

India's primary market will see a slightly dull week with just one mainboard listing.

Garuda Construction and Engineering's proposed public offering consists of a fresh issue of 183 lakh shares and an offer for sale of 95 lakh shares, according to the draft red herring prospectus. The total offer size is 2.78 crore shares.

Hyundai Motor India Pvt. is expected to launch the country's largest initial public offering as soon as Oct. 14, according to sources. The price band for the $3 billion offering is likely to be announced next week, with the IPO set to open on Oct. 14–15, the sources said, requesting anonymity.

Although, it's still not clear when Swiggy will launch its IPO, the food delivery company's shareholders have approved increasing the fresh issue component of its IPO to Rs 5,000 crore from Rs 3,750 crore.

This will allow the company to raise an additional Rs 1,250 crore if needed, according to people familiar with the matter. The offer for sale component remains at Rs 6,664 crore, with investors selling 18.5 crore shares. This could bring the total IPO size to Rs 11,664 crore, up from the current clearance of Rs 10,414 crore.

Corporate Action Ahead

KP Energy Ltd. and Blue Cloud Softech Solutions Ltd. will issue their final dividend next week and Jupiter Wagons Ltd. and Shraddha Prime Projects Ltd. will announce their interim dividends.

Geojit Financial Services Ltd. will issue right shares and NBCC (India) Ltd. and Power Mech Projects Ltd. will issue bonus shares.

Jindal Saw Ltd., New Light Apparels Ltd. and Rajnish Retail Ltd. will see a share split. Virat Industries Ltd. will host an extraordinary general meeting.