Tata Power's Singapore loss now costs more than a year's profit

Thursday, 27 August 2026 · pre-open edition · overnight moves, fresh filings & what should matter in today's session

Snapshot · Commodities, rates & macro

The big picture: sticky US inflation, a giant Nvidia quarter & a hawkish home front

• Overnight in the US. The three big indices closed marginally lower: the Dow fell 0.21% to 53,464, the S&P 500 slipped 0.02% to 7,676 & the Nasdaq eased 0.08% to 26,130. The trigger was the July PCE price index, the inflation measure the Fed actually targets: core PCE (which strips out food & energy) rose 3.3% year-on-year, in line with forecasts, while headline PCE at 3.7% came in a touch above the 3.6% expected. With the target at 2%, inflation has now run above target for roughly five years, & the market's question has flipped from "when do they cut" to "do they hike again in September".
• Nvidia, after the close. Revenue of $96.2 billion for the July quarter, up 106% year-on-year & well above the ~$92 billion consensus; earnings per share of $2.22 against $2.10 expected; data-centre revenue of $89 billion, now 92% of the whole company. Guidance for the October quarter is $108 billion, plus or minus 2%, against a $104 billion consensus, assuming zero China data-centre sales. Management also said the top five hyperscalers' capex could rise to ~$1.3 trillion next year from ~$800 billion, & AWS committed to buying 2 million Nvidia GPUs. The stock rose ~4% after hours, though US futures gave back part of the early pop by this morning IST.
• What it means for the Fed. The fed funds band sits at 3.50–3.75% & the September meeting is live: prediction markets put a 25 bps hike at roughly one-in-three odds, while some bank desks put it closer to two-in-three. The Jackson Hole symposium begins tonight, & the centrepiece is new Fed Chair Kevin Warsh's first symposium speech. A hawkish Warsh plus sticky PCE is the combination that keeps long yields elevated worldwide, including ours.
• Asia this morning & India's likely open. Asia is mixed: the Kospi is up ~1.5% (absorbing the Bank of Korea's hike comfortably, since the hike comes with a growth upgrade), the Nikkei is down ~0.4% & Hong Kong ~0.2% lower. GIFT Nifty at ~24,346, down ~84 points, points to a flat-to-negative open. On Wednesday the Sensex fell 0.24% to 77,473 & the Nifty 0.52% to 24,208, with IT down 1.47% ahead of Nvidia, banks up 0.47% (Kotak +3.76%) & smallcaps up 0.62%. FIIs were small net buyers in cash (+Rs. 503 crore) while DIIs bought a large Rs. 6,425 crore.
• The domestic rates story is the quiet one to internalise. India's 10-year G-sec yield sits at 6.85%, near a two-month high, after MPC minutes showed members openly discussing tightening. A detailed report this morning suggests the RBI may first impose an incremental cash reserve ratio (iCRR), which forces banks to park a slice of fresh deposits with the RBI, to drain a core liquidity surplus heading toward Rs. 9–10 trillion, before touching the repo rate. Higher-for-longer domestic rates is a direct input cost for every leveraged business & every NBFC. The rupee traded near 95.74 to the dollar in early trade, with the RBI defending the ~95.80 area; the record low of ~96.5–96.8 was set in late July.

Global & overnight markets: the AI capex engine is fine; the bond market is the argument

• The Treasury's buyback experiment. The US Treasury said last week it will at least double its long-end liquidity-support buybacks from $2 billion to $4 billion-plus per operation between 9 September & 4 November, & reports suggest Secretary Bessent could fund purchases from the ~$1 trillion cash balance rather than fresh issuance, which is why markets have started calling it Treasury-led QE. What is QE? Quantitative easing, buying long bonds to push their yields down. The buybacks pulled long yields lower for two days & then stopped working: the 30-year still sits near 5.17% against a 5.33% mid-August peak that was the highest since 2007. Veteran investor Druckenmiller publicly criticised the move as undermining the Treasury market's credibility.
• Korea's hike is a growth story, not a distress story. The Bank of Korea raised its policy rate 25 bps to 3.00% this morning, the second straight hike, on a 6-1 vote. Core inflation at 2.6% is the highest since December 2023 & Q2 GDP grew three times faster than the central bank forecast, on the semiconductor boom; the 2026 growth forecast moved up from 2.6% to 3.3%. The Kospi rising ~1.5% into a rate hike tells the story: markets will accept tightening when it comes with upgraded growth.
• Meta settles. Meta agreed to pay up to $16.7 billion to settle US state lawsuits over teen social-media harms; the stock rose ~4%. A large number, but Meta earns that in roughly a quarter, which is why the market treated certainty as good news.
• The Iran picture behind the oil move. The Strait of Hormuz, through which about a fifth of the world's oil flows, has been effectively shut since the US-Israel strikes on Iran began in late February. What changed this week is a discussed Iran–Oman temporary maritime corridor, with Qatar mediating, plus US sanctions that landed softer than feared. Brent has unwound from ~$94 to ~$86.6 in about a week. Tehran cautions that reopening needs more than the Oman accord, so this remains a headline-by-headline trade rather than a settled de-escalation.
• US immigrant-visa pause. The US has paused immigrant-visa interviews worldwide, cancelling scheduled appointments while officers are retrained to screen for applicants who may need public assistance. It is not India-specific but hits Indian applicants hard in practice; Indian IT & travel-linked names carry the sentiment risk.
• Elsewhere. Bitcoin ~$78,300; the dollar index ~99.1; European indices closed firm (DAX +0.44%).

Macro: the iCRR debate, a first-of-its-kind services PPI, & sugar's 16% month

• The iCRR mechanics, in plain language. Banks must always park a fixed share of deposits with the RBI (the cash reserve ratio, CRR). An incremental CRR adds a temporary extra requirement on fresh deposits only. Why consider it now? Core (durable) liquidity in the banking system may cross Rs. 9–10 trillion in coming weeks as government spending picks up before the festival season, & the overnight call rate (5.18%) is already trading below the 5.25% repo rate even with daily absorption auctions. Hiking the repo rate while overnight money trades below the current rate would be hiking in name only, which is why economists (ICICI Securities PD, IDFC First) expect the RBI to drain liquidity first, via iCRR, OMO sales or forex forwards, with a rate hike possible as early as the 5–7 October MPC & December "at the latest" on some desks. The precedent: August 2023's 10% iCRR, which absorbed over Rs. 1 trillion & was unwound within two months.
• What this means practically. For borrowers & NBFCs, funding costs stay firm or rise. For banks, an iCRR parks deposits at zero return, a small drag on margins. For bond yields, drained liquidity pressures the short end most. The 10-year at 6.85% already carries much of this news; Friday's benchmark auction is the next supply signal.
• India's new Service PPI. The commerce ministry released the first Services Producer Price Index reading (Q1 FY27, base 2022-23) on Sunday: air passenger services prices rose a sharp 31.94% year-on-year, with pensions, railways, insurance & telecom up, & securities-transaction & banking services down. What is a PPI? An index of prices producers receive, as opposed to the CPI's consumer-paid prices. A services PPI gives the RBI a window into services inflation at the wholesale level for the first time; a young index, so treat single readings gently.
• Inflation context. July CPI came in at 4.45%, a 19-month high & the second month above the RBI's 4% target, with food at 5.52%. August CPI lands around 12 September. The RBI's August bulletin meanwhile describes the domestic economy as showing "notable resilience" with buoyant demand, which, read together with the minutes, supports the tightening bias rather than argues against it.
• Sugar, the specific price problem. Retail sugar rose ~16% in a month to Rs. 55.70/kg by 20 August, as this season's production estimate fell ~11% to 30.6 million tonnes. The Centre has responded with duty-free imports of 1 million tonnes of raw sugar until 31 October plus tighter bulk stockholding limits, & prices have begun easing. The world market is also short (~3.3 million tonne deficit estimated for 2026-27), so imported relief is real but not cheap. Mills' ethanol diversion has already fallen from ~12% of sugar output in 2022-23 to ~9%, keeping the sugar-ethanol policy question unresolved.