Bank of America's economists now expect the Reserve Bank of India to begin a rate-hiking cycle at its October 7 meeting, bringing forward their earlier call for a December hike, as resilient growth and broadening inflation risks force a shift away from monetary accommodation.
BofA sees 100 basis points of hikes in total, taking the repo rate to 6.25% by the first half of 2027.
Markets under pressure
Indian equities faced another weak open on Wednesday, with the Nifty at 22,800 after Nifty futures closed Tuesday at 22,893. Analysts said there are no positive triggers to revive market sentiment, with selling pressure likely to intensify — especially from foreign portfolio investors pushing markets further down.
The Nifty 50 crashed 6.3% in the September series, marking its worst September since 2001, when it dropped 13.53%. Crude oil prices surging on the Iran-US conflict have pushed inflation sharply higher across global economies, prompting central banks to tighten — the US Fed and Australia's central bank have both hiked rates.
Oil offers a breather, but outflows weigh
There was some relief on the crude front on Tuesday, with WTI slipping into the $89–$90-a-barrel range and Brent retreating toward $95–$96. "Foreign investor flows remain a significant headwind. Persistent foreign selling, alongside elevated US Treasury yields, could continue to limit the durability of any recovery in domestic equities," said Ponmudi R, CEO of Enrich Money.
Whether the modest improvement translates into a sustained recovery will depend on oil price stability, the trajectory of global bond yields and whether foreign selling begins to moderate, analysts said.
Sources: Negative opening likely for Indian stock markets
BofA sees 100 basis points of hikes in total, taking the repo rate to 6.25% by the first half of 2027.
Markets under pressure
Indian equities faced another weak open on Wednesday, with the Nifty at 22,800 after Nifty futures closed Tuesday at 22,893. Analysts said there are no positive triggers to revive market sentiment, with selling pressure likely to intensify — especially from foreign portfolio investors pushing markets further down.
The Nifty 50 crashed 6.3% in the September series, marking its worst September since 2001, when it dropped 13.53%. Crude oil prices surging on the Iran-US conflict have pushed inflation sharply higher across global economies, prompting central banks to tighten — the US Fed and Australia's central bank have both hiked rates.
Oil offers a breather, but outflows weigh
There was some relief on the crude front on Tuesday, with WTI slipping into the $89–$90-a-barrel range and Brent retreating toward $95–$96. "Foreign investor flows remain a significant headwind. Persistent foreign selling, alongside elevated US Treasury yields, could continue to limit the durability of any recovery in domestic equities," said Ponmudi R, CEO of Enrich Money.
Whether the modest improvement translates into a sustained recovery will depend on oil price stability, the trajectory of global bond yields and whether foreign selling begins to moderate, analysts said.
Sources: Negative opening likely for Indian stock markets
