Brent at a six-month high and five central banks set the tone for Dalal Street's week

Indian shares go into the last week of October with oil climbing, foreign investors still selling and the world’s big central banks lined up to speak. Brent crude, the benchmark for most of what India imports, settled at $116.72 a barrel on Friday, up 3.1% on the day and its highest close since 29 April.

The rise came on growing expectations that the United States and Israel could strike Iran again after the US midterm elections, and on Houthi attacks on Saudi targets, including the Shuqaiq oil facility. Brent gained 6.2% over the week, its third weekly rise in a row, while West Texas Intermediate crude closed 3.8% higher at $103.27.

A weak finish abroad

Wall Street ended the week lower. The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16 on Friday as selling spread from technology to consumer and healthcare shares. The S&P 500 lost 0.52% and the Nasdaq Composite 0.21%.

Much of that came after Indian trading had ended. In Friday afternoon trade, Gift Nifty, the dollar-denominated Nifty contract traded at GIFT City in Gandhinagar, stood at 22,603, just 3 points above the Nifty’s close of 22,600 and pointing then to a flat Monday start. The later fall in New York and the jump in oil were not in that price.

Where Dalal Street stands

The Nifty fell 2.36% and the Sensex 2.15% last week, with four losing sessions in a row. Mid-sized and smaller companies took the worst of it, falling by about 5.6% and 7.3% on their main indices. The rupee ended Friday at a provisional 94.93 to the dollar.

Foreign institutional investors sold a net ₹2,697.37 crore of shares over the four trading days, according to provisional exchange data, while domestic institutions bought ₹10,942.19 crore and were buyers in every session.

Ravi Singh, chief research officer at Master Capital Services, sees the Nifty’s support near 22,300 and then 22,000. “On the upside, the 22850-22900 zone remains a crucial resistance area, coinciding with the 21 days EMA,” he said on Saturday.

The first test will come on Monday in technology shares, after Infosys cut its revenue growth forecast for the year to 1% to 2% after Friday’s close.

Five central banks in four days

The week is unusually crowded with rate decisions. The Reserve Bank of New Zealand goes first, early on Wednesday India time, and is widely expected to raise its rate to 3% from 2.75%. The Bank of Canada decides on Wednesday evening, with economists expecting it to hold at 2.25%.

The US Federal Reserve ends its two-day meeting on Wednesday and announces its decision at 11:30 pm IST. Its target range is 3.75% to 4%, and futures markets put only a small chance on a rise this week, though they price a December increase as likely.

The European Central Bank follows on Thursday at 6:45 pm IST. It has raised rates twice since the Iran war began, in June and September, and is expected to keep its deposit rate at 2.5% this time. The Bank of Japan announces on Friday, around midday in Tokyo, and is expected to hold at 1.25%.

Beyond the banks, China’s Communist Party holds a plenary session of its Central Committee from Monday to Thursday, Israel votes in a general election on Tuesday, and Britain presents its budget on Wednesday.