RBI MPC meeting, PMI numbers, crude oil among factors to dictate Dalal Street mood this week

The Indian markets will closely monitor the RBI Governor-headed six-member monetary policy committee (MPC) meeting, which is scheduled from October 4–6, 2023. Governor Shaktikanta Das will announce the MPC's decision on October 6 and is expected to maintain a status quo on key policy rates.

"Reports suggest that the RBI is likely to maintain its pause on interest rate hikes at this meeting. Aside from that, market participants will be keeping an eye on the movement of the rupee against the dollar and crude oil prices. Investments by foreign institutional investors (FIIs) and domestic institutional investors (DIIs) will also be monitored," said Pravesh Gour, Senior Technical Analyst at Swastika Investmart.

As many as seven IPOs, mainboard and SME combined, are set to list on indices next week, starting October 3.

JSW Group company JSW Infrastructure and jewellery retailer Vaibhav Jewellers are expected to make their debuts on the bourses on October 3, much before their scheduled listing dates.

On the mainboard, Plaza Wires will close for subscription on October 5 and Valiant Laboratories will close on October 3.

Last week, foreign institutional investors net sold equities worth Rs 8430.77 crore, while domestic institutional investors net bought equities worth Rs 8143.28 crore.

Cumulatively, FIIs net sold Rs 26,692.16 crore worth of equities in the month of September while DIIs net bought equities worth Rs 20,312.65 crore. Going ahead, it will be key to monitor this trend in the backdrop of easing the dollar index.

"The sustained selling has been in response to steady dollar appreciation which took the dollar index close to 107 and the steady rise in the US bond yields which took the US 10-year bond yield to around 4.7 per cent. The spike in Brent crude to USD 97 also weighed on FPI selling,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Crude oil prices, which saw a mid-week rally, scaled lower towards the end of last week. While Brent crude futures lost 1.2 per cent to wrap up the week at $92.2 per barrel, the crude oil futures on the MCX posted a gain of 0.9 per cent to close the week at Rs 7,542 a barrel.

Analysts said raising of bets by participants kept crude oil prices higher in futures trade.

"Investors need to be on alert given the rise of oil prices. If crude continues to stay above the 90 USD level, it will be a threat to inflation and boil the operational margins," Nair said.

The market will also take cues from some major domestic and global macroeconomic data such as S&P global manufacturing and services PMI data of different countries.

"Global markets are in a brittle mode because everyone is eyeing the US shutdown deadline, US bond yield, and dollar index. These factors will be closely monitored, as they have the potential to influence market sentiment," Gour said.

In the coming week, the Fed members are set to make appearances at various events. On Monday, Fed Chair Jerome Powell and Patrick Harker will take part in a roundtable talk with business owners in Pennsylvania. Fed's Williams and Mester will also speak at separate events tomorrow.