The Nifty 50 Index has crashed in the past few days, with technology companies being the top laggards. It was trading at ₹24,765, down 3.65% from the year-to-date high. This article explores the top catalysts for the Nifty Index this month.
Nifty 50 Index to react to RBI interest rate decision
One of the main catalysts for the Nifty 50 Index this month will be the Reserve Bank of India (RBI) interest rate decision on Wednesday.
The RBI has been cutting interest rates in the past few months, moving from 6.5% earlier this year to 5.5% today, its lowest level since 2022.
Economists expect the central bank to cut interest rates by 0.25% in this meeting. That’s because India’s inflation has remained lower-than-expected.
The most recent numbers showed that the headline consumer inflation rose to 2.07% in August from 1.6% in the previous month. Still, this inflation rate remains much lower than last year’s high of 6.1%.
The bank will cut rates to support the economy, which has become highly embattled. Its biggest challenge is that the Indian economy is struggling because of Donald Trump’s tariffs.
Trump has placed a 50% tariff on most goods from India. And most recently, he sent shockwaves by announcing a $100,000 fee hike to the popular H1-B visa program.
This fee hike has mostly affected top Nifty 50 Index companies like Tata Consultancy Services (TCS), Wipro, and Infosys that ship thousands of Indians to the US annually.
Top corporate earnings
The Nifty 50 Index will react to the upcoming corporate earnings this month. Tata Consultancy and HCL Tech will publish their earnings on October 9.
These results will provide more color on the impact of Trump’s policy on the H1B visa. They will also provide more information on the demand from companies as the artificial intelligence hype continues.
Infosys and Nestle India will publish their earnings on October 16, while Reliance and Tata Consumer Products will publish on October 17. The other top companies that will publish their financial results this week are ICICI Bank, HDFC Bank, Kotak Mahindra, and Yes Bank.
Most importantly, the Nifty 50 Index will also react to the upcoming earnings from top American companies like Microsoft, Apple, Google, and Meta Platforms.
US and India trade relations
The other notable catalysts to watch this month will be the trade relations between the US and India.
Media reports suggest that Indian and US teams are working behind the scenes to reach an agreement on trade.
Trump wants India to lower tariffs and also to stop importing Russian oil and gas, something that Narendra Modi has rejected.
A deal that reduces tariffs from India will benefit the Nifty 50 and the Sensex this week.
Federal Reserve interest rate decision
The Nifty 50 Index will also react to the upcoming Federal Reserve interest rate decision. Economists expect the bank to start cutting interest rates by 0.25% and anticipate further cuts later this year.
A Federal Reserve rate cut and a pledge for more will benefit global stocks by incentivizing a risk-on sentiment. In most cases, global stocks rally when the Federal Reserve is cutting rates.
Nifty 50 Index technical analysis
The daily timeframe chart shows that the Nifty 50 Index has remained under pressure in the past few months. It dropped from a high of ₹25,660 in July to the current ₹24,773.
The index has formed a slanted double-top pattern whose neckline is at ₹24,340, its lowest level in September. Therefore, the stock will likely continue falling as sellers target the important support level at ₹24,340, the lowest swing in August.
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