Indian bonds are under pressure as the central bank defends the rupee and inflation rises. Benchmark 10-year yields hit their highest since March 2023 after the RBI announced measures to support the currency, including requiring banks to hold more cash and conducting open-market bond sales. Inflation accelerated to 5.54% in September, nearing the upper limit of the central bank’s tolerance band, raising expectations of further interest-rate hikes. The rupee strengthened about 1% on Monday, moving away from the critical 97-per-dollar level, but analysts warn the defense measures could tighten financial conditions further. Meanwhile, technology stocks gained after HCL Technologies reported better-than-expected quarterly profit. The Nifty 50 fell 0.7%, underperforming broader Asian markets amid a selloff in AI-related equities ahead of earnings season.
Hospital stocks declined due to concerns over potential drug-price caps, but Citigroup sees the drop as a buying opportunity, estimating only a 1–3% impact on earnings. Diagnostics firms are expected to benefit from rising demand for early testing and chronic disease management, with Axis Securities recommending Dr. Lal Path Labs, Vijaya Diagnostic, and Nephrocare as top picks.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing