Global reset offers opportunities as Fed signals rate hold, says Groww's Nirav Karkera
Indian equities have spent the last two years consolidating, while earnings continued to grow, creating a more reasonably priced market than at its peak, said Nirav Karkera, head of Growth at Groww. The global reset, driven by a shift in monetary policy and geopolitical dynamics, presents new chances for investors in the Indian market.
Market Background
On 22 October, the Nifty 50 index closed at 22,512, up 0.4%, while the BSE Sensex hovered around 63,000, reflecting a steady market mood. The Federal Reserve is expected to keep the policy rate unchanged at 5.25% in its October meeting, a move that could reduce borrowing costs for Indian corporates and support consumption. Meanwhile, the Reserve Bank of India (RBI) has maintained a cautious stance, keeping the repo rate at 4.45% to balance growth and inflation.
Earnings growth remains robust, with the composite index of the top 50 companies reporting a 12% YoY increase in Q3 2026. This, coupled with a more realistic valuation framework, has attracted attention from both domestic and foreign investors. The rupee has also gained strength, rising 29 paise to 94.62 against the dollar, partly due to inflows from the Jio IPO and a stable Fed outlook.
Key Developments
| Metric | Value | Signal |
|---|---|---|
| Nifty 50 closing | 22,512 | Bullish |
| Sensex closing | 63,000 | Bullish |
| Fed policy rate | 5.25% | Neutral |
| RBI repo rate | 4.45% | Neutral |
| Rupee vs USD | 94.62 | Bullish |
The market is also benefitting from a series of corporate developments. L&T secured two large orders for the Delhi Secretariat and Amaravati Towers, underscoring the resilience of the infrastructure sector. In the tech space, Ericsson India announced a strategy to expand R&D and local supplier integration, positioning the company for export growth.
Sector Impact
- Technology: Ericsson India’s expansion plans and Hexaware Technologies’ record dividend of ₹9.50 per share for FY2026 signal confidence in the IT services sector.
- Chemicals: Morgan Stanley’s recent call for Deepak Nitrite, Aarti, and PI Industries indicates bullish sentiment in the chemicals space.
- Infrastructure: L&T’s new contracts for Delhi Secretariat and Amaravati Towers highlight continued demand for large‑scale infrastructure projects.
- Consumer: The rupee’s appreciation and stable Fed stance support consumer spending, benefiting retail and FMCG companies.
- Energy: India’s refining capacity reached 267.1 MTPA, as highlighted by Rubio, reflecting a strategic shift in crude imports from Venezuela.
Macro & Regulatory Context
The Federal Reserve’s decision to hold rates is a key macro driver. A steady policy rate reduces the cost of capital for Indian firms, potentially boosting investment and earnings. The RBI’s cautious approach to monetary policy ensures inflation remains under control while supporting growth. On the regulatory front, SEBI continues to monitor IPO activity, with the recent Tonbo Imaging IPO closing at a price band of ₹665-700, raising Rs 852 crore.
What to Watch
- Fed October meeting: Any deviation from the expected hold could alter market sentiment.
- Q4 earnings: Companies like Deepak Nitrite and Aarti are slated to report in the next month.
- RBI policy statements: Watch for any changes in repo rate or liquidity measures.
- International events: The ongoing Iran-Israel conflict could impact commodity prices and risk sentiment.
- Corporate news: L&T’s new orders and Ericsson India’s R&D expansion are likely to influence sector performance.
Disclaimer: This article is for information only and is not investment advice. Markets involve risk; consult a SEBI‑registered adviser before acting.
