The coming week is one of the busiest of the year. The US midterm election on Tuesday could determine whether the Iran conflict escalates and where oil goes. In India, ITC’s results, two IPO listings and the start of Diwali spending will show how resilient the market and consumers are.
Indian markets enter November with momentum. The Nifty is back above 23,000 and both benchmarks ended October higher. The week ahead has several events that could change that.
Tuesday: the US midterm elections
The biggest risk is in the US. On Tuesday, Americans vote in the midterm elections, which will determine control of Congress. For India, the main issue is not who wins but what happens next.
President Trump has repeatedly suggested military action against Iran could resume after the election. Oil rose more than 2% on Friday partly on that concern, and Brent ended October up 13.6%. Goldman Sachs estimates about $27 of the oil price is a risk premium that would rise further if strikes happen and fall quickly if a deal is reached.
The outcome could move Indian markets more than any domestic event this week. Expect caution before Tuesday and a sharp reaction afterwards.
Monday: ITC results and the EAAA listing
ITC reports September-quarter results on Monday, and expectations are low. Higher cigarette taxes have pushed it to raise prices by about 25% on average. JM Financial expects cigarette volumes to fall about 8% and cigarette operating profit to drop as much as 29%. Q1 profit already fell 27%. Investors will look at whether the FMCG, paper and agri businesses can partly offset the cigarette weakness.
EAAA India Alternatives also lists on Monday. The Edelweiss asset manager’s IPO started very slowly, with 0.05 times subscription on the first day, before institutional buying lifted it to 5.25 times. The grey market points to a flat listing, with a premium of under 1%.
Tuesday: BLS Polymers and SFC Environmental
Two smaller IPOs list on Tuesday. BLS Polymers, a ₹255 crore issue of new shares from a maker of polymer compounds, had a stronger grey market premium than SFC Environmental, a ₹667.53 crore wastewater treatment company. Their listings will show whether the stronger demand for small IPOs in priority sectors is continuing.
Global central banks
The Bank of England is expected to raise rates this week, following a week in which every dissenting vote at the Fed and BoJ favoured higher rates. US jobs data is also due. A strong report would increase the chance of a Fed increase in December, which would be negative for emerging markets including India.
Friday: Dhanteras
Dhanteras on Friday, 6 November, starts the main Diwali buying period, traditionally the biggest day for gold and jewellery purchases. With gold above ₹1.4 lakh per 10 grams, jewellers will be watching whether high prices reduce volumes or whether buyers stick with tradition. Diwali is on Sunday, 8 November.
Dividend dates
Coal India’s ₹10.25 interim dividend has a record date of Wednesday, 4 November. NTPC’s ₹3 dividend has a record date of Friday, 6 November.
Domestic news this week is mostly positive: record vehicle sales, record GST collections and strong festive demand. But oil and US politics could override all of it. If Tuesday passes without escalation, Indian shares could extend their recovery into Diwali. If US strikes on Iran resume, oil is likely to rise above $120 and most of the past two weeks’ gains could be lost.
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