Nifty’s 0.33% rise leaves India watching oil, yields and foreign flows

Indian equities enter Monday with domestic buying providing a cushion, but the recovery remains sensitive to global rates and oil. Foreign institutional investors returned as net buyers in the cash market on September 18 after seven sessions of selling, purchasing shares worth Rs 599 crore, while domestic institutions bought more than Rs 1,000 crore. The broader September backdrop is less supportive: foreign portfolio investors have withdrawn Rs 20,974 crore from Indian equities through September 18, according to data cited by market reports.

HDFC Bank led the banking rebound, with SBI and Punjab National Bank also adding to the move. Market reports linked the financial-sector support partly to Moody’s upgrade of India’s FY27 growth forecast to 7%, which reinforced expectations for domestic credit growth. ICICI Bank and Kotak Mahindra Bank lagged the broader banking move, limiting the index’s advance.

UltraTech Cement was among the stronger index constituents as buying returned to cement and materials stocks. Analysts also linked the recent relief in Indian equities to the retreat in Brent crude from its recent highs, although crude remains elevated and the rupee is near 96 to the dollar. TCS and Tata Motors Passenger Vehicles were among the main drags, keeping information technology under pressure. Tata Chemicals also fell sharply on Friday after uncertainty emerged around the future structure and possible listing of Tata Sons.

The immediate market explanation is a balance between domestic liquidity and external risk. Lower oil prices and easing concerns over a prolonged disruption to Saudi supply have helped sentiment, while the prospect of higher US yields and renewed foreign selling remains a constraint. These are market interpretations rather than a confirmed causal relationship.

Infrastructure and industrial shares have a company-specific cushion from fresh project announcements. RVNL disclosed a Rs 404.88 crore railway order from East Coast Railway, while Welspun Enterprises said its subsidiary won two Ahmedabad sewer-rehabilitation projects worth Rs 351.24 crore in total. GR Infraprojects also disclosed progress on its Agra-Gwalior greenfield highway project. The announcements help explain the relative strength of the infrastructure complex, though their effect on earnings will depend on execution and timing.

The Reserve Bank of India is withdrawing liquidity through bond sales. Reuters reported that the central bank sold shorter-duration bonds worth Rs 50,000 crore last week, its first net sale through an auction since November 2017, and is scheduled to sell debt worth Rs 25,000 crore on September 21 and again the following Monday. Traders expect the liquidity drain to keep upward pressure on bond yields and to remain relevant for rate-sensitive financial stocks.

SEBI’s board is scheduled to meet on September 24. Proposals under consideration include changes to settlement regulations, a mutual-fund-only category within portfolio management services, wider foreign portfolio investor access to certain commodity derivatives, and depository receipts linked to REITs and InvITs. These are proposals, not approved rules.

The latest available macro prints offer a mixed but still firm domestic backdrop. August CPI inflation was 4.82% year-on-year, with food inflation at 5.95% year-on-year. July industrial production grew 6.7% year-on-year, according to the available data. August infrastructure-output data is due on September 21, while the September flash PMI is due on September 23.

Wall Street finished mixed on Friday, with technology shares firmer while the Dow weakened. Asian shares were higher early on Monday, led by technology and chip stocks, and US equity futures also edged up. Reuters attributed the regional technology support to expectations of strong data-centre and artificial-intelligence demand. Japan’s cash market was closed for a public holiday.

The US 10-year Treasury yield returned to around 5% after the Federal Reserve’s rate decision, keeping global duration risk in focus. For India, higher US yields can make dollar assets relatively more attractive and add pressure to the rupee and domestic bond valuations. Brent crude eased to $103.06 a barrel in early Monday trading, but continuing Middle East tensions leave the supply outlook uncertain.

The dollar was broadly steady in the overnight market. Indian traders are also watching portfolio flows: Friday’s cash-market buying by foreign institutions was positive, but it came against a sizeable September outflow. That split leaves domestic institutions as an important support for the opening session while global risk factors remain unresolved.

Corporate news is concentrated in infrastructure, energy and consumer regulation rather than quarterly results. Oil India plans to invest around Rs 1,500 crore over the next three years to expand deepwater exploration and intends to drill eight deepwater wells, although the final number may change after seismic-data interpretation. Welspun Corp’s associate company also signed a Saudi Aramco steel-pipe contract worth 771 million Saudi riyals, with a six-month execution period.

Nestlé India said its NAN Excella Pro and Lactogen Pro products comply with applicable regulations and that their labels were approved by an expert committee of the Food Safety and Standards Authority of India. The company is responding to legal action initiated by the food regulator over alleged non-compliance. The development matters for the consumer-staples stock because the dispute concerns infant-nutrition products, but the available material does not provide a quantified earnings impact.

No results, guidance update or rating action with a reported consensus comparison was available in the pre-market material. Accordingly, there is no evidence here to describe a result as a beat or miss.

Primary-market activity remains heavy despite the recent weakness in the secondary market. The NSE issue, priced at Rs 1,700 to Rs 1,785 a share and structured as an offer for sale, closes on September 21. Its shares are scheduled to list on September 24. Manika Plastech is scheduled to make its market debut on Monday.

The next mainboard issues include Varmora Granito, which is scheduled to open on September 22, followed by Elevate Campuses, ArMee Infotech, Swastika Infra and Adroit Industries on September 23. A-One Steels is scheduled to open on September 24. The concentration of offerings will test how much domestic liquidity can be directed to new issues while foreign investors remain net sellers for the month.

No confirmed block or bulk deal was identified in the available material before the open.