Rupee Steadies Above Record Low; Equities Extend Losing Streak

HIGHLIGHTS

• SEBI may address mutual funds’ concerns on expense ratio, cost structure
• SEBI likely to penalise MCX for four-hour trading halt
• India’s fiscal deficit widens to 36.5% of FY26 target in April–September
• Lenskart IPO fully subscribed on Day 1
• Ford to resume India operations with ₹32.50 billion plan focused on engine manufacturing
  
  

Indian equities ended lower for the second straight session on October 31, as weakness in metal, IT, and media stocks outweighed gains in public sector banks. The benchmark Nifty 50 slipped 0.6% to 25,722.10, while the Sensex fell 0.55% to 83,938.71.

Markets opened flat amid mixed global cues but failed to sustain early strength, closing near the day’s low as investors turned cautious ahead of key macroeconomic data and global central bank meetings. Broader markets mirrored the decline, with the BSE Midcap and Smallcap indices losing 0.5% and 0.4%, respectively.

Sectorally, PSU banks emerged as the day’s bright spot, rising 1.5% on continued buying in State Bank of India, Canara Bank, and Bank of Baroda. In contrast, power, metal, and media indices slipped around 1% each, while IT, healthcare, and private bank stocks registered moderate losses.

Despite the weak close, both Sensex and Nifty ended October with monthly gains of nearly 4.5%, supported by strong earnings and sustained domestic inflows. For the week, however, the benchmarks edged down 0.3% and 0.6%, respectively. Market sentiment in the near term will likely hinge on global bond yields, foreign fund activity, and domestic policy signals.

 

Top Gainers	% Change	Top Losers	% Change
NIFTY MEDIA	-1.32%	NIFTY PSU BANK	1.56%
NIFTY METAL	-1.09%	NIFTY OIL & GAS	0.07%
NIFTY HEALTHCARE INDEX	-0.89%
NIFTY FINANCIAL SERVICES	-0.87%
NIFTY PRIVATE BANK	-0.75%

Indian government bonds ended higher on Friday as the Reserve Bank of India accepted less than the planned amount at its weekly auction, easing concerns about excess supply and providing relief to a market that had turned bearish in recent days.

The government raised ₹210 billion against a scheduled ₹320 billion, as the central bank rejected all bids for the 6.28% 2032 paper. The benchmark 10-year yield eased to 6.5317%, down from 6.5730% on Thursday, after briefly touching 6.5964% earlier in the session--its highest since October 1.

Traders said the smaller-than-expected sale offset the impact of earlier losses triggered by doubts over further rate cuts and concerns about tight banking system liquidity. Market participants viewed the move as timely, as yields were approaching the 6.60% mark.

For the month, the benchmark yield fell about 5 basis points after rising in September. However, trading volumes have stayed subdued due to shrinking liquidity, while investors await clarity on the Reserve Bank’s stance in the upcoming policy meeting.

 

Tenure	Today	Previous
10-year Gilt	6.53%	6.57%
5-year gilt	6.18%	6.15%
5-year OIS	5.67%	5.69%

The Indian rupee ended slightly lower on Friday but managed to stay above its record low as state-run banks intermittently sold dollars to curb volatility. The local unit closed at 88.7650 per dollar, down marginally on the day and almost flat for the month.

Earlier this month, the rupee had briefly strengthened to 87.6250, aided by the Reserve Bank of India’s heavy intervention, but those gains have since faded. Market participants expect the central bank to continue intervening to smooth sharp moves, though sentiment remains biased toward gradual depreciation in the absence of concrete progress on a US–India trade deal.

While a senior government official indicated that a pact between the two nations is “very near,” traders remain cautious amid lingering uncertainty. Global factors also continue to shape the rupee’s outlook. Signs of easing US–China trade tensions supported Asian peers, but a stronger dollar—buoyed by hawkish US Federal Reserve commentary—has limited upside for the Indian currency.

The dollar index rose to 99.54, up nearly 2% for the month, while the rupee weakened about 1% this week. Market focus will now shift to upcoming portfolio flows from major IPOs, which could offer temporary support to the rupee in early November

Unit	Today	Previous
Dollar/Rupee	88.765	88.695
Dollar Index	99.16	99.52
1-year Dollar/rupee premium (%)	2.18%	2.23%

 OUTLOOK

The Indian markets are likely to begin the next week on a cautious note, with sentiment shaped by currency weakness, global risk aversion.

The rupee is expected to stay under pressure after briefly stabilising today. While intermittent intervention by the RBI may cap volatility, traders expect the currency to drift closer to its record low near 88.80 per dollar if foreign outflows persist. Portfolio flows linked to upcoming public offerings could, however, provide intermittent support.

In the bond market, government securities are likely to trade steady following surprise relief when the RBI accepted lower-than-planned bids at the weekly auction today.

Equities may open mixed, with investors watching global cues and the rupee trajectory closely. A weaker currency could pressure import-heavy and IT sectors, even as PSU banks and defensives draw buying interest.

Key Events & Data Due Monday: 

Economic Data

• China Oct Caixin Manufacturing PMI
• India Oct S&P Global Manufacturing PMI
• US Oct ISM Manufacturing PMI

 Corporate Actions

• Earnings: 3M India, Ajanta Pharma, Ambuja Cements, Aurionpro Solutions, Bharti Airtel, Bharti Hexacom, City Union Bank, JK Paper, Kirloskar Brothers, Power Grid Corporation of India, Sundaram Finance, Taj GVK Hotels & Resorts, TATA CONSUMER PRODUCTS, Thangamayil Jewellery, Titan Company, Wockhardt,
• ESAF Small Finance Bank to consider fund raising
• Silly Monks Entertainment to consider fund raising
• Ujaas Energy to consider fund raising 

Policy Events

• FOMC Member Daly Speaks