The US President’s decision to hike H-1B visa application fee to USD 100,000, paired with a progression in the trade talks between India and the US and the GST rate cut implementation from September 22 would be the key drivers influencing stock markets in the week that begins on September 22, say analysts.
Besides, trends in global equity markets and macroeconomic data would also be tracked by investors who continue to keep an eye on the performance of US markets in the aftermath of the Federal Reserve’s rate cut.
"This week, markets will first react to the US imposing an annual fee of USD 100,000 on H-1B visas, which was announced late Friday. While export-driven sectors are already grappling with tariff-related pressures, this move could further weigh on IT services exporters at a sensitive time when trade negotiations remain underway," observed Ajit Mishra – SVP, Research, Religare Broking Ltd.
News that President Donald Trump had signed a proclamation hiking fees for H-1B visa application to USD 100,000 (about ₹88 lakh) created ripples in the USD 285-billion Indian IT sector, being the US’ its largest outsourcing market.
Apex industry body Nasscom warned that the business continuity for onshore projects will be disrupted as a result of the move, especially as Indian tech professionals account for over 70 per cent of H-1Bs.
Also Read: US Fed meeting, WPI inflation to drive stock markets this week
"This move could sharply increase costs for US clients and reduce demand for Indian tech talent, directly impacting the revenue visibility of large IT exporters such as TCS, Infosys, and Wipro," agreed Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
On the domestic front, traders will also monitor rupee movement and crude oil prices, both of which remain key drivers for Indian equities, he added.
Meanwhile, Commerce and Industry Minister Piyush Goyal will lead an official delegation to the US for trade talks on September 22, an official statement said on Saturday.
The delegation plans to hold talks with a US team to take forward discussions with a view to achieve early conclusion of a mutually beneficial trade agreement, it said.
During the last visit of the team of officials from the office of United States Trade Representative to India on September 16, positive discussions were held on various aspects of the trade deal, and it was decided to intensify efforts in this regard.
Meanwhile, the prices of several everyday essentials and electronics, medicines, and automobiles will get cheaper from September 22 as the reduced GST rates on about 375 items come into effect.
In a bonanza to consumers, the GST Council, comprising the Centre and states, announced a reduction in tax rates on goods and services from September 22 – the first day of the Navaratri.
Markets this week would also track trading activity of foreign investors. Foreign Institutional Investors (FIIs) bought equities worth ₹390.74 crore on Friday, according to exchange data.
On the global front, focus now shifts to key US macroeconomic data, including GDP, manufacturing and services PMI, and PCE Price Index.
Vikram Kasat, Head – Advisory, PL Capital, said, "As India heads into the festive season, all eyes are on how markets digest recent GST rate cuts, evolving consumer demand trends, and the steady stream of IPOs that have kept primary market activity resilient despite global volatility."
Last week, the BSE benchmark jumped 721.53 points or 0.88 per cent, and the Nifty climbed 213.05 points or 0.84 per cent.
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