Issue: 1348
· The rupee climbed to a
more-than-one-month high. The rupee gained 0.4% to 94.9125 against the dollar intraday,
making it Asia’s best-performing currency for the day.
· India Inc salary hikes set to
improve in 2027; NBFCs lead at 10.1%.
· I-T dept nudges 12,000 tax
professionals to file AY 26-27 audit reports by deadline.
· Gem, jewellery exports up 9%
on better demand.
· India plans BS-VII emission
norms for new cars and SUVs from April 2029.
· IMF warns, AI could hit 40%
of jobs worldwide.
India’s short-term
borrowing costs hit four-year high as rate hike bets rise: The Indian government's ultra-short-term borrowing
costs jumped at a treasury bill auction ?on Wednesday, with the premium over
the benchmark ?policy rate rising to a four-year high as ?investors priced in
more aggressive monetary policy ?tightening. The Reserve Bank of India hiked rates
for the first time in nearly four years last week and ?shifted its stance,
signalling more increases, while Governor Sanjay Malhotra on Tuesday said
monetary policy ?cannot be seen as separate from ?financial stability, ?prompting traders to ramp up rate hike ?bets. India on Wednesday sold 182-day and 364-day
treasury bills at cutoff yields of 6.29% and 6.49%, respectively, their highest
levels ?in about 18 ?months. Yields for both maturities rose more than 20 basis
points compared to a week ago.
(Business Line)
US dollar hits 18-month
high as hotter inflation revives Fed rate hike concerns: The US dollar hit an 18-month
high on Wednesday after stronger-than-expected inflation data ?revived
expectations for a Federal Reserve interest rate hike later this month,
highlighting concern ?that price pressures are broadening across the economy. The
US dollar index, a measure of the greenback's strength against a basket of six
currencies, rose 0.68% to 102.86, its highest since ?April 2025, shaking off
the previous day's losses.
(Business Line)
Wholesale inflation jumped
to 11.4% in Sept: Wholesale inflation, based on WPI, surged to
11.4 per cent in September, driven by a sharp rise in food, fuel and commodity
prices, according to data released by the government on Wednesday. The print stood
at 9.9 per cent in August. The latest reading is the highest in the current WPI
series with 2022-23 as the base year. According to the Commerce Ministry,
year-on-year inflation in Primary Articles, Fuel and Power, and Manufactured
Products stood at 8.67 per cent, 25.85 per cent, and 9.76 per cent,
respectively, in September 2026, compared with 7.76 per cent, 22.93 per cent,
and 8.37 per cent in August.
(Business Line)
IDBI Bank stake sale to
Fairfax: Govt to sell 60.72% stake for Rs 52,877 crore: The Union Cabinet approved the
sale of a 60.72% stake in IDBI Bank to Canada Inc, an entity of Fairfax Financial
Holdings, for Rs 52,878 crore, clearing a key step in the lender’s strategic
restructuring. The government will sell a 30.48% stake, while Life Insurance
Corporation of India (LIC) will divest 30.24%, according to the Department of
Investment and Public Asset Management (DIPAM). Fairfax will also have to make
an open offer to IDBI Bank’s minority shareholders. Since Fairfax already holds
a stake in CSB Bank, it must either merge CSB with IDBI Bank or exit its
investment within two years.
(Financial Express)
MFI constitute the largest
share of lending portfolio in June 2026: Lending from microfinance
institutions constituted 43 per cent of the Rs.3.3 lakh crore of the loan
portfolio balance in June 2026, according to data from Transunion CIBIL. This
share stayed at around 36 per cent to 38 per cent between June 2022 to June
2025, making this the most significant increase in five years. The only other
category which borrowers preferred to take their loans from was NBFC, as its
share increased to 15 per cent from 10 per cent in four years ago. Small
Finance Banks (SFBs) as a share of total portfolio stayed at around 16 per
cent. Share of banks in total portfolio reduced significantly in the past three
years. The share was 27 per cent in June 2026, down from 34 per cent in June
2025 which itself was lower than 35 per cent in June 2024. Between June 2019 to
June 2024, the preference for banks increased.
(Business Line)
Canara Bank Q2 net profit
rises 8% to Rs 5,175 crore: Canara Bank reported an 8%
year-on-year increase in net profit to Rs.5,175 crore for the quarter ended
September 2026, driven by growth in core interest income, even as a sharp
decline in treasury income weighed on non-interest income. Total interest
income of the state-run lender rose 11% year-on-year to Rs.35,159 crore in
Q2FY27, while interest expenses increased at a slower pace of 8% to Rs.24,154
crore. This helped net interest income (NII) grow 20% to Rs.11,005 crore. Net
interest margin expanded 5 basis points to 2.55% during the quarter. Advances
continued to grow faster than deposits. Domestic advances rose 17% year-on-year
to Rs.12.64 lakh crore, while domestic deposits increased 11% to Rs.15.47 lakh
crore. Asset quality improved during
the quarter. The gross NPA ratio declined to 1.33% as of September 2026, from
1.57% in June 2026 and 2.35% a year earlier. The net NPA ratio fell to 0.30%
from 0.36% in the previous quarter and 0.54% in September 2025.
(Financial Express)
IDBI Bank-Fairfax deal:
Government to retain 15% stake, LIC to hold 19%: The government will retain a
15% equity stake in IDBI Bank and Life Insurance Corporation will hold 19%.
Both the government and LIC will withdraw their nominees from the bank's board
and become public shareholders. The Cabinet Committee on Economic Affairs has
empowered the Alternative Mechanism for minority stake sales of the
government's holdings. LIC will manage its residual shareholding as per
internal procedures and regulatory compliance.
(Economic Times)
Paytm's Indian ownership
rises to 56%; domestic institutions continue to raise stake: In a notable development, One
97 Communications Ltd., Paytm's parent company, observed a significant rise in
domestic share ownership as of Q2 FY 2027. Indian investors now hold over 56%
of the firm, which illustrates a positive trend towards local equity
involvement. Furthermore, domestic institutional ownership has soared to 29.5%,
reflecting heightened engagement from local institutional players. In contrast,
foreign direct investment declined to 18.
(Economic Times)
Jio Platforms IPO: Price
band set at Rs 1,065-1,119 for India’s biggest share sale: Jio Platforms Ltd, the digital and telecom arm of
Reliance Industries, has set a price band of Rs 1,065-1,119 per share for its
initial public offering, which could raise Rs 30,213 crore at the upper end of
the range, making it India’s largest-ever public offering. The IPO, comprising a
fresh issue of up to 27 crore equity shares with a face value of Rs 10 each,
will open for subscription on Wednesday, October 21, and close on Friday,
October 23. At the upper end of the price band, the IPO will
surpass Hyundai Motor India's Rs 27,858.75 crore offering in 2024, which currently
holds the record for India's largest IPO. The proposed issue is also around 47%
larger than Life Insurance Corp. of India's Rs 20,557.23 crore IPO.
(Moneycontrol)
Starlink unwilling to
comply with domestic infrastructure requirements: Govt official: Starlink has yet to receive clearance to
launch services in India because it is unwilling to comply with regulations
requiring domestic infrastructure, a senior government official said on
Wednesday. The remarks bring the infrastructure requirements
into focus after Elon Musk accused Indian business interests of obstructing
Starlink’s entry to protect established monopolies. The government has rejected
his criticism as “baseless and misconceived”, saying operators must meet
security requirements before commencing services. “They will need to establish local ‘base stations’
for them to be allowed to offer services in India,” the official stated.
(Moneycontrol)
US oil, gas supplies to
India fall 43% as West Asia imports rebound: West Asian producers led by the UAE, Iraq and
Saudi Arabia will continue to be India’s leading energy suppliers once the war
ends and cannot be replaced by the United States, three senior refining
officials told Business Standard, as US oil and gas supplies fell sharply in
September from this year’s high in May. Indian imports of crude oil, liquefied natural gas
(LNG) and liquefied petroleum gas (LPG) from the US declined 43 per cent in
September to a combined 1.22 million tonnes from 2.13 million tonnes in August,
marking the lowest level since April.
(Business Standard)
SEBI proposes sweeping
changes to SME IPO rules, eases entry for investors: SEBI has proposed a sweeping overhaul of the SME
IPO framework, seeking to widen investor participation, reduce fundraising
costs and strengthen investor safeguards. Under the proposed framework, eligibility for SME
listings would be determined by post-issue market capitalisation instead of
paid-up capital. Companies with a post-issue market capitalisation of up to Rs
1,000 crore would have to list on SME platforms, while those valued above Rs
1,000 crore and up to Rs 4,000 crore could choose between SME and main-board
listings, subject to additional financial reporting requirements.
(Moneycontrol)
Henley Passport Index 2026:
Indian passport climbs to 84th rank, visa-free countries falls to 55: India has moved up one position to rank 84th
in the October 2026 edition of the Henley Passport Index, even as the number of
destinations accessible to Indian passport holders without obtaining a visa
beforehand has declined. According to the latest ranking released by Henley
& Partners, Indian citizens have access to 55 destinations, compared with
57 in October 2025. India shares the 84th position with Algeria and Mauritania. The Henley Passport Index
ranks 199 passports based on the number of destinations their holders can visit
without securing a visa in advance. Singapore has retained the top position in the
latest index, with its passport holders enjoying access to 193 destinations
without a prior visa. Japan, South Korea and the United Arab Emirates jointly
occupy second place, with access to 188 destinations each. The United States is
ranked 10th, with access to 180 destinations.
(Business Today)
RBI’s oil-dollar window
aims to ease rupee pressure: The Reserve Bank of India’s special dollar
window for state-run oil marketing companies could shift around $11-12 billion
in monthly dollar demand away from the spot foreign-exchange market, easing
pressure on the rupee and lowering treasury and hedging costs for Indian Oil,
BPCL and HPCL, according to industry experts. The RBI opened the special window
on October 12 to meet the entire daily dollar requirement of IOC, BPCL and
HPCL, allowing the companies to buy dollars through designated banks rather
than compete for them in the spot market.
(Business Standard)
J-CURVE
§
A J-curve is a trendline that shows an initial loss
immediately followed by a dramatic gain. In a chart, this pattern of activity
would follow the shape of a capital "J".
§
The J-curve effect is often cited in economics to illustrate
the way that a country’s balance of trade initially worsens following a
devaluation of its currency, then quickly recovers and finally surpasses its
previous performance.
§ J-curves are observed in other fields including
medicine and political science. In each case, an initial loss is followed by a
significant gain to a level that exceeds the starting point.
RBI KEY RATES
Repo
Rate: 5.50%
SDF:
5.25%
MSF
/Bank Rate: 5.75%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 95.0317
INR
/ 1 GBP : 126.0969
INR
/ 1 EUR : 106.5264
INR
/100 JPY: 60.0300
EQUITY INDEX
Sensex:
72781.89 (-251.89)
NIFTY:
22622.70 (-99.25)
Bnk NIFTY: 55316.00 (-165.05)
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