Economy and regulatory updates
- The India HSBC Flash Manufacturing PMI rose to 58.4 in October 2025 from 57.7 in September 2025, while Flash Services PMI fell to 58.8 from 60.9 and Flash Composite PMI fell to 59.9 from 61.0.
- Chief Economic Advisor (CEA) V Anantha Nageswaran said India’s economy is performing better than expected and is likely to post growth north of 6.7% in the current financial year, noting that earlier concerns about a slowdown have eased significantly.
- The finance ministry maintained a strong growth outlook for fiscal 2026 amid global uncertainties, supported by a positive demand outlook due to goods and services tax reforms, favourable monsoons, lower inflation, and monetary easing.
- According to data released by the National Statistics Office, India Industrial production expanded 4% on-year in September 2025, consistent to the upwardly revised, 4.1% increase in August 2025.
- The Union Cabinet sanctioned a substantial Rs 37,952 crore subsidy for phosphorous and potassic fertilisers.
- The government approved seven projects under the Electronics Component Manufacturing Scheme, involving investments worth Rs 5,532 crore and a total production target of Rs 44,406 crore.
- The Reserve Bank of India (RBI) released a draft circular proposing limits on banks’ exposure to capital markets and acquisition finance, aimed at strengthening financial stability and promoting prudent lending practices.
- The RBI has proposed reducing the risk weight on high-quality infrastructure projects financed by non-banking financial companies.
- The Securities and Exchange Board of India (SEBI) decided to extend the timeline for qualified stock brokers to come up with the necessary systems for the implementation of optional T+0 settlement cycle.
- SEBI proposed incentives for certain categories of retail investors to encourage them to invest in public issues of debt securities.
Domestic macroeconomic indicators
Indian debt market update
- The interbank call money rate ended higher at 5.10% on October 31 compared with 5.72% on October 24.
- Government bond prices ended flat in the week ended October 31 and the yield on the 10-year benchmark 6.33% 2035 paper closed at 6.53% on October 31 compared with 6.54% on October 24.
- Bond prices fell earlier in the week after US Fed’s hawkish tone dampened rate cut hopes. Bond prices declined after the US Federal Reserve Chair, Jerome Powell, signalled that a December rate cut was not a done deal. Prices fell further following concerns over tight domestic banking system liquidity.
- However, further fall in prices were cut short on supply concerns as the central bank sold lesser debt than scheduled at a weekly auction.
- In the weekly debt sale held on October 31, the government raised Rs 21,000 crore through an auction against the target of Rs 32,000 crore as the RBI did not accept any bids for the 6.28% 2032 bond.
Indian debt market indicators
India yield curve shift (%) (W-o-W)*
Indian equity market updates
- Indian equity ended lower this week, dragged down by profit booking, renewed US-China trade tensions and concerns over the US Federal Reserve pausing further rate cuts. However, some gains were driven by optimism over softer US inflation data. BSE Sensex and Nifty 50 fell 0.32% and 0.28%, respectively.
- Almost all major sectors ended lower with Auto, Healthcare and Information Technology (IT), losing the most. BSE Auto, BSE Healthcare and BSE IT fell 0.89%, 0.79%, and 0.70%, respectively.
- The domestic market bought Rs 6,889 crores worth of equities on October 31, 2025, compared with selling of Rs 128 crores worth of equities on October 24, 2025.
- Foreign institutional investors sold equities worth Rs 3,151 crore on October 30, 2025, compared with buying of Rs 864 crores on October 24, 2025.
Indian equity Indices
Global Equity market summary
- US stocks rose during the week, driven by a lighter-than-expected inflation report and rise in technology and semiconductor stocks. Additionally, strong corporate earnings and a potential easing of trade tensions led to further gains. However, a few losses were witnessed due to the government shutdown and mixed tech results.
- Meanwhile, the US Federal Reserve’s hawkish tone also impacted investor sentiment, causing caution among investors.
- Britain’s FTSE Index rose during the week, buoyed by a surge in defence, mining, banking and technology stocks. Additionally, surge in oil prices and strong earnings forecasts from drugmaker led to further gains.
- However, a few losses were witnessed due to mixed corporate earnings reports.
- Asian equities ended the week mixed. Japan's Nikkei index ended higher during this week, driven by optimism over the new prime minister's spending plans, investments in artificial intelligence, and gains in technology stocks.
- However, a few losses were witnessed due to profit-booking and on a stronger yen, which exerted pressure on exporters’ stocks.
- Hong Kong's Hang Seng Index ended lower during the week, dragged down by concerns over the outcome of the US-China meeting and Powell’s hawkish comment.
- Additionally, weak economic data from China led to further losses.
- China's Shanghai Composite Index closed higher during this week buoyed by investor optimism over a potential breakthrough in trade negotiations between the US and Beijing. Additionally, rise in energy and non-ferrous metal shares, following upbeat earnings led to further gains.
- However, a few losses were witnessed due to profit booking and China's weak factory activity in October.
Global equity benchmark indices’ returns
Global Yield
- US Treasury prices declined this week after the US Federal Reserve Chair, Jerome Powell, indicated another easing in December was far from certain.
- Bond prices declined as the Fed’s decision to cut the benchmark federal funds rate to a range of 3.75- 4.00% was widely expected, but Powell's indication that another easing in December was far from certain surprised investors. The central bank’s statement slightly upgraded its view of the economy, which also contributed to the rise in treasury yields.
- Throughout the week, investors were influenced by the lack of timely economic data due to the government shutdown, as well as the softer-than-expected September inflation data released by the Bureau of Labor Statistics.
- The yield on the 10-year benchmark Treasury Bond ended at 4.11% on October 30 compared with 4.02% on October 24.
Major global bond yields
Commodities and Currency
- Crude oil prices fell during the week as OPEC’s output plans offset optimism over a US-China trade deal and renewed sanctions on Russia.
- Gold prices ended lower this week due to profit booking at the higher level amid hopes of US-China trade deals and strong dollar index.
- The rupee closed lower against the US dollar this week, pressured by foreign fund outflows, a strong dollar index and a cautious sentiment following the US Federal Reserve’s hawkish stance on further rate cuts. However, short gains were seen due to likely central bank intervention.
Commodity prices
Other currencies vs the rupee
Global Economic
- The Federal Reserve lowered the federal funds rate by 25 bps to a target range of 3.75%–4.00% at its October 2025 meeting.
- The Eurozone economy grew 1.3% year-over-year in Q3 2025, compared to 1.5% in Q2 2025.
- The European Central Bank left interest rates unchanged for a third consecutive meeting in October, signaling confidence in a resilient eurozone economy and easing inflation pressures. The main refinancing rate remained at 2.15%, while the deposit facility rate stayed at 2.0%.
- UK S&P Global Flash Manufacturing PMI rose to 49.6 in October 2025, compared to 46.2 in September 2025 while the S&P Global Flash Services PMI rose to 51.1 from 50.8 and the S&P Global Flash Composite PMI rose to 51.1 from 50.1.
- The Bank of Japan kept its benchmark short-term rate unchanged at 0.5% in October 2025, maintaining borrowing costs at their highest level since 2008.
- Japan’s industrial production increased 3.40% on year in September of 2025 from -1.6% in the previous month.
Macro indicators
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