Global Mood: Cautiously risk-off
Drivers: US midterm elections, US-Iran tensions

Asian markets were mixed on Wednesday as investors tracked US midterm election results and assessed Wall Street’s performance. South Korea’s Kospi rebounded 1.6%, while Japan’s Nikkei 225 fell 1.56% and the Topix slipped 0.55%. Australia’s S&P/ASX 200 declined 0.52%. US equity futures turned lower amid speculation that Democrats could gain control of both chambers of Congress.

S&P 500 futures fell 0.6%, Nasdaq-100 futures lost 0.5% and Dow futures declined 252 points. Brent crude traded at $104 a barrel, up 0.69%, as uncertainty over US-Iran peace negotiations kept oil prices elevated. The GIFT Nifty was trading at 23,714, down 46 points or 0.19%, pointing to a mildly negative opening for Indian equities.

THE BIG STORY
US defensive strikes on Iran's Qeshm Island and Tehran's threat of retaliation raise escalation risks despite ongoing Qatar-led mediation. Iran maintains that sanctions relief, an end to the US blockade and the release of frozen funds are prerequisites for reopening Hormuz and resuming nuclear talks. Trump says Washington has no immediate plans for further strikes, while both sides continue reviewing proposals.

Iran warned of a forceful response to any renewed US attack, while talks with Saudi Arabia continue on regional security arrangements.

Oil prices rebounded as doubts over a US-Iran deal and risks to Strait of Hormuz shipping persisted.

Democrats are projected to flip the first Senate seat and lead in scores of GOP-held House districts. Half of voters saw the elections as a rebuke to Trump, with affordability and higher fuel prices weighing on sentiment. Democrats face a tougher Senate contest, while the Justice Department's deployment of election monitors drew criticism.

Data Spotlight
US job openings unexpectedly increased by 333,000 to 7.523 million in September, from a revised 7.19 million in August, exceeding expectations of 7.10 million and reaching a four-month high. Openings rose across professional and business services, manufacturing, construction and state and local government.  Hires and total separations remained broadly unchanged at 5.4 million and 5.3 million, respectively. 

Layoffs fell to 1.641 million, their lowest since March 2025, while the quits rate rose to 2.1%, its highest in more than a year, indicating continued confidence among workers. US factory orders increased 1.8% month-on-month in September, beating expectations of 1.2% and recording their strongest rise since April.  Transportation equipment orders rose 4.6%, driven by a 28.3% surge in civilian aircraft and parts. 

Orders excluding transportation rose 1.3%, while those excluding defence increased by 2.0%, pointing to broader strength in manufacturing demand.

US crude inventories fell by 5.267 million barrels in the week ended October 30, defying expectations for a 2.1-million-barrel increase and extending the previous week's decline. 

Takeaway: The unexpected rise in US job openings, fewer layoffs and a higher quits rate point to continued labour-market resilience, potentially limiting the scope for near-term Federal Reserve easing. Stronger factory orders also indicate firm manufacturing demand, while the larger-than-expected crude inventory draw could support oil prices in the near term. Together, the data suggest that US economic activity remains resilient, keeping inflation and monetary policy in focus.

WHAT HAPPENED OVERNIGHT

US Stocks Rise as Chipmakers Rebound Ahead of US Midterm Results; Apple Slides

• Wall Street ended mixed on Tuesday, with the Nasdaq rising 0.83% to 25,372.01 and the S&P 500 gaining 0.36% to 7,568.92. The Dow fell 0.38% to 51,787.04 as investors awaited US midterm election results.
• AI heavyweights and chipmakers rebounded after recent losses. Nvidia gained 2.3%, Micron rose 2.6%, while Microsoft and Amazon advanced more than 2% each. The Philadelphia semiconductor index also climbed.
• Investor attention remained on the US midterm elections and their potential implications for fiscal policy, regulation, taxation and government spending.
• Oil prices eased as investors weighed diplomatic efforts to end the conflicts in Iran and Ukraine against the risk of further supply disruptions.

US Dollar Steadies Near 101.8 as Investors Await US Midterm Results and Jobs Data

• The US dollar index held around 101.8 on Tuesday after heightened volatility in the previous session, as investors turned cautious ahead of the US midterm elections.
• Prediction markets indicated a 74% probability of Democrats gaining control of the Senate, while elevated energy prices linked to the Iran conflict remained a political and economic concern.
• Investors are awaiting the US jobs report later this week for fresh signals on labour-market conditions and the Federal Reserve's policy outlook.
• Markets continued to price in a roughly 75% probability of a 25-basis-point Fed rate hike in December, following the central bank's decision to hold rates steady in October.
• Signs of diplomatic progress between the US and Iran eased geopolitical concerns and reduced demand for the dollar as a safe-haven asset.

US Treasury Yields Rise to 4.96% as Strong Labour Data Revives Rate-Hike Bets

• US 10-year Treasury yield rose to 4.96% after stronger-than-expected JOLTS data signalled labour-market resilience, potentially giving the Fed room to raise interest rates to contain inflation.
• Investors are positioned for potential volatility around US midterm elections, with a focus on whether Democrats could gain control of both chambers of Congress.
• A divided government could reassure bond investors by limiting further fiscal expansion, although it would not address the underlying budget deficit.
• US Treasury lowered its Q4 borrowing estimate by $10 billion to $618 billion, citing a higher-than-expected opening cash balance.
• Oil prices extended Monday’s sharp decline after President Donald Trump said Washington would end its $4 billion aid programme to Israel by year-end.

Oil Falls to Near Four-Week Low as Peace Talks Raise Hopes of Reduced Supply Disruptions

• Brent fell 1% to settle at $103.60 a barrel, its lowest close since Oct 7, while WTI declined 0.4% to $96.09, its lowest since Oct 14.
• Hopes of progress in US-Iran mediation and planned Russia-Ukraine-US peace talks in Abu Dhabi on Nov 10-11 weighed on prices.
• Qatar said Washington and Tehran remained committed to mediation and were reviewing proposals to narrow differences, although an Iranian official said the two sides remained far from a deal.
• Supply risks persisted after US strikes on Iran's Qeshm Island and fresh Russian and Ukrainian attacks on energy infrastructure and oil facilities. ING said meaningful progress in peace talks could put further downward pressure on prices.
• Saudi Aramco is working to expand a crude pipeline bypassing the Strait of Hormuz, which previously handled around 20% of global oil supplies.
• Analysts estimated US crude inventories rose by 0.9 million barrels in the week ended Oct 30. If confirmed, this would mark the first increase in five weeks. API and EIA inventory reports were due Tuesday and Wednesday, respectively.

Day’s Ledger*

Economic Data

• India October S&P Global Services PMI
• India October Manufacturing & Services PMI
• Germany October HCOB Services PMI
• Eurozone October HCOB Services PMI
• UK October S&P Global Services PMI
• Eurozone October CPI
• US October ADP Non-farm Employment Change
• US October S&P Global Services PMI
• US October ISM Non-Manufacturing PMI
• US Crude Oil Inventories

Policy

• ECB's Lane Speaks

Corporate Actions

• Earnings: Apollo Hospitals Enterprise, Aurobindo Pharma, BSE Limited, Housing & Urban Development Corporation, NHPC Limited, Power Finance Corporation, Shipping Corporation Of India, Torrent Power

Tickers to Watch

• NSE July-September 2026 net profit down 17.4% QoQ to 25.759 billion rupees from 31.201 billion rupees. Revenue down 10.8% to 40.668 billion rupees. EBITDA down 13.3% to 30.79 billion rupees. Margin narrows to 75.7% from 77.86%.
• LUPIN Launches Raltegravir Tablets USP, 600 mg, in the US after USFDA ANDA approval. Used with other antiretrovirals to treat HIV-1 in adults. Lupin is the exclusive first-to-file applicant, eligible for 180-day generic drug exclusivity.
• Highway Infrastructure Receives LOA worth 1.983 billion rupees from CPWD for residential and non-residential infrastructure under Phase I of the CISF 12th Reserve Battalion at Village Jamunia Talab, Madhya Pradesh, on EPC Mode-I basis.

Must Read

• Centre plans to expand import clearance gateways for drugs, medical devices
• NLMC aims to mobilise upto ₹15K cr in FY27 via asset monetisation of PSUs
• India ranks 32nd among 34 Asia-Pacific economies in women managers: ILO
• Green hydrogen push faces reality check as projects struggle to take off
• BPCL buys 1 million barrels of US WTI crude for delivery in late December
• India eases forex reporting rules for small value service exports, imports
• India's top gas importer sets eyes on US LNG under long-term deal with Qatar
• India's NSE International Exchange expands trading to 23-1/2-hours
• From grains to chicken and milk, India faces prolonged food inflation
• India’s Exports Show Resilience in April-September, but Concerns Remain
• Nepal’s Disasters Expose a Missing Link in Infrastructure Finance
• Why India Needs a Rate Defence of Its External Sector
• Telangana’s Rising Tax Revenues Must Pay a Dividend to Its Cities
• India’s Banking Reforms Must Look Beyond Bigger Banks
• Banking Reform: Can Another Committee See Beyond Regulatory Silos?

(*Compiled from various media sources)

See you tomorrow with another edition of The Morning Edge.

Have a great trading day