The week ahead in numbers: Inflation trajectory, export growth, NSE IPO

India's primary market will also remain busy, with the much-awaited initial public offering (IPO) of the National Stock Exchange Ltd (NSE) opening for subscription alongside issues from other companies.

Here are the key developments to watch over the next seven days:

Mounting pressures

August inflation will be among the week’s key economic data releases, with both consumer price index (CPI) and wholesale price index (WPI) figures due on 14 September. Weak and uneven rainfall and higher fuel prices are expected to keep food prices elevated. Food inflation rose to 5.5% in July from 5.2% in June, with the increase broadening across individual items. A Mint analysis showed that the number of CPI items recording higher inflation rose to 238 in July from 228 in June, while those recording lower inflation fell to 108 from 115.

Among food items, ginger inflation rose to 83.6% in July from 50.4% in June, while garlic inflation jumped to 35.4% from 17.9%. Onion inflation also rose sharply, to 22.5% from 4.7%. Core inflation stood at 4% in July, while transport inflation was 4.4%. With Brent crude above $100 a barrel, the August data will show whether higher food and fuel costs are spreading to a wider set of prices.

Export pulse

India’s August trade data is due this week against a backdrop of major shifts in global fuel trade. Merchandise exports have grown strongly in the first four months of FY27, but the composition of that growth has varied across months.

Petroleum products have been a major contributor: their exports rose 67.6% year-on-year to $6.92 billion in July, helping merchandise exports reach a record $44.24 billion, up 19.6%. In the first four months of fiscal year 2027 (FY27), petroleum-product exports rose 42% year-on-year, compared with a 15% decline in the same period last year. Excluding petroleum, export growth stood at 13.6% in July.

The shift has come as disruptions to supplies from Russia and West Asia have altered fuel trade flows, with Indian refiners supplying more diesel to overseas markets. Crude oil prices have again moved towards $100 a barrel as the West Asia conflict continues to disrupt energy markets, raising the risk that a higher import bill could offset some of the gains from exports.

The August data will therefore need to be read beyond the headline export number. Product-level figures will show whether gains are broad-based or remain concentrated in a few sectors, while the import basket will indicate how much additional pressure is coming from oil, gold and other major commodities. The data will also offer an early indication of whether India’s external position is becoming more vulnerable to the latest oil shock even as exporters report stronger orders.

Policy watch

Three major central banks will announce their interest rates decisions next week, with the US Federal Reserve, Bank of England and Bank of Japan facing different inflation and growth pressures.

Since January 2025, the Fed has cut its policy rate by 75 basis points to 3.75%, while the UK has lowered interest rate by 100 basis points to 3.75%. Japan has moved in the opposite direction, raising its rate by 50 basis points to 1%.

The Fed meets on 15-16 September, with higher oil prices and inflation still above target, at 3.4% in August, complicating the case for further easing. Some economists now expect a rate increase before the end of 2026. The Bank of England is expected to hold at 3.75%, while the Bank of Japan is expected to raise its rate to 1.25% on 18 September.

For India, the key implication is the widening gap between domestic and global rate settings. Higher US and Japanese rates could strengthen their currencies and reduce foreign investor demand for Indian bonds and equities, while putting further pressure on the rupee.

Draining liquidity

The RBI will begin its open-market bond sale worth ₹1 trillion this week as the banking system grapples with a large liquidity surplus following heavy foreign-currency inflows. Banks mobilized $136.4 billion through the RBI’s special swap facility by 31 August, including $127.2 billion through the FCNR(B) window. As a result, banking system liquidity rose to ₹10.43 trillion, while core liquidity crossed ₹14 trillion, according to RBI data.

RBI will sell government securities in three tranches: ₹50,000 crore on 17 September, followed by ₹25,000 crore each on 21 and 28 September. The sales will absorb some of the surplus liquidity, but could also put upward pressure on bond yields as more government securities enter the market. The liquidity surplus is likely to remain a focus for the RBI even after the first round of OMO sales.

Emkay Research expects durable liquidity to remain above the RBI’s preferred range, suggesting that further liquidity absorption measures could remain in play. For markets, the key watch will be how quickly the RBI drains the surplus and how bond yields respond.

IPOs galore

India's primary market is headed for a busy week, with several IPOs set to open as investors weigh a fresh set of equity offerings. The NSE’s much-awaited IPO will draw the most attention when it opens for subscription on 17 September. Hero Motors, SS Retail and Jindal Supreme are scheduled to open on 16 September, while the Sonaselection India issue will open on 17 September.

NSE’s issue, at about ₹22,562 crore, has been pared back from the much larger offering initially proposed. It remains entirely an offer for sale, with existing shareholders selling their stakes rather than the exchange raising fresh capital. Some shareholders have opted to sell a smaller portion of their holdings, allowing the IPO to proceed without increasing its size. The IPO will give existing investors an opportunity to monetize their holdings while bringing NSE’s ownership structure into sharper focus. The price band and valuation will be closely watched given the scale of the offering and NSE’s strong financial performance.