The RBI's potential double hike is now a central theme in the market, with Nomura's research suggesting a cumulative 50‑basis‑point increase to counter rising inflation.
Inflation risk looms as core rates could climb above 6% if energy costs and El Niño‑driven food price pressures persist, according to Head of Global Macro Research Robert Subbaraman.
On the global front, the Fed is expected to raise rates by 25 bps this week and another 25 bps in December, keeping the 2% inflation target in focus.
The market has priced in a 90% probability of a Fed hike, which could push the 10‑year Treasury yield higher and put upward pressure on corporate bonds.
For Indian banks, the RBI's dual hike could tighten credit conditions and impact loan growth, while the higher rates may boost net interest margins for larger banks.
Forward‑looking, traders should monitor RBI's policy statement in October and the Fed's December meeting for any shift in tone, as the next quarterly earnings cycle for banking and fintech firms will be sensitive to these rate moves.