1. Inflation in India

India is expected to release retail price inflation data for September on Tuesday. The figure has moderated in recent months, due to the base effect. Future data will show whether sequential price pressures continued to intensify in September.

The Monetary Policy Committee’s projections last week implied a forecast of 4.4% for September, a further cooling from 5.3% in August. However, that would be a continuation of the base effect: retail prices were up 7.3% in September 2020. brand too. With the base effect fading towards the end of the year, inflation rates could only increase.

The pressure on retail could also come from wholesale, whose data is due on Thursday. Inflation at factory exits accelerated slightly in August and a further rise could come on top of already persistent retail sales inflation driven by supply-side factors.

2. IT gains

Three major IT companies will report their September quarter results. These include Wipro and Infosys on Wednesday and HCL Technologies on Thursday.

In the June quarter, Infosys posted its best first quarter result in a decade, Wipro posted its best quarter ever and HCL posted healthy 12% year-over-year revenue growth.

The September quarter is also shaping up to be strong, with annual sales growth likely to be in the double digits. The sector has benefited from strong demand driven by further digitization and higher corporate spending on cloud migration, analysts at Motilal Oswal said. The strong growth dynamic should maintain the dynamism of IT stocks this year despite already high valuations.

A pain point for the sector which is likely to eat away at its margins is high attrition as well as salary increases due to increasing competition from start-ups. However, the major companies appear to be well placed to absorb supply pressures.

3. HDFC Bank Results

India’s largest private lender, HDFC Bank, will report its September quarter results on Saturday. The bank posted 6.7% annual revenue growth in the June quarter, while profits jumped 16.1%. However, the disruption to business activity due to the second wave of covid-19 is expected to reverse in the results.

The bank performed well in the September quarter, recording strong year-on-year credit growth of 15.4%, even when the banking sector as a whole managed just 7%, according to data from the Reserve Bank of India . The lender has seen a strong pull in its business loan portfolio and with the lifting of the embargo by RBI on its credit card business, a healthy recovery is expected in personal lending.

In the meantime, analysts and shareholders will keep an eye on the slippages, especially in the segment of small and medium-sized enterprises and agricultural loans.

4. IMF Outlook

The International Monetary Fund (IMF) will publish its latest issue of World Economic Outlook on Tuesday. The report will provide an overview of the new and long-term challenges facing the world as it recovers from the pandemic.

Since the last edition in July, a resurgence of covid-19 in several countries may have changed the IMF’s perspective on global growth. IMF chief Kristalina Georgieva said last week that the multilateral body now sees the world growing at a slower pace this year than the 6% forecast earlier.

The report is expected to focus on three main issues, including disparities in economic growth, inflation and debt, and achieving faster growth and long-term economic stability.

The IMF had reduced India’s growth forecast for 2021-2022 in July from 12.5% ​​to 9.5% to account for the impact of the second wave of the pandemic. The new projection is in line with that of RBI and should be retained.

5. American inflation

Retail price inflation in the United States stood at 5.3% in August, barely slipping from the 13-year high of 5.4% in June and July. Sequentially, however, the increase was only 0.3%, the slowest since January. September figures are due on Wednesday.

In August, prices increased in all categories of items, except for air fares and used cars. However, core inflation has fallen more than the overall figure.

Supply disruptions and a recovery in demand have fueled recent inflation. The US Federal Reserve sees it as temporary and not yet widespread, expecting it to fall to 2.2% next year. Sluggish job growth and consumer spending last month showed the economy is indeed slowing, giving credit to the Fed’s stance and possibly pushing back its schedule to cancel the purchase program. obligations.

The risk of viruses and supply issues will remain for the time being. Will the Fed see them as red flags?