Economy and regulatory updates
- The Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) voted unanimously to increase the policy repo rate 25 basis points (bps) to 5.50%.
- Accordingly, the standing deposit facility rate is 5.25%, while themarginal standing facility rate and bank rate are 5.75%. The MPC changed its stance to ‘calibrated tightening’ from ‘neutral’.
- The RBI revised its fiscal 2027 real gross domestic product (GDP) growth forecast upwards 40 bps to 7.1%.
- The central bank raised this fiscal’s Consumer Price Index-linked inflation forecast to 5.2% while highlighting upside risks from the below-normal monsoon, El Niño-related weather disruptions and elevated global crude oil prices.
- India's HSBC Manufacturing PMI rose to 55.1 in September against 52.8 in August. The HSBC Composite PMI rose to 55.9 compared with 54.3 while the Services PMI edged up to 55.2 from 54.1.
- The World Bank raised India’s GDP growth forecast for this fiscal to 7.1% from 6.6%, citing strong domestic demand, resilient industrial and services activity and stronger-than-expected economic performance.
- The RBI formed the Financial Market Consultative Committee to enhance dialogue with market participants and improve financial market policymaking.
- The central bank has enabled interoperability among account aggregators, allowing seamless consent-based financial data sharing across platforms and strengthening India’s digital financial infrastructure.
- The Securities and Exchange Board of India (SEBI) introduced a mandatory colour-coded credit risk-o-meter for debt securities to make information about credit risk easier for potential investors.
Source: MOSPI, RBI *Data as of October 4th, 2025
Indian debt market update
- The interbank call money rate ended lower at 5.00% in the week ended on October 9 compared with 5.20% in the week ended October 1.
- The yield on the 10-year benchmark 6.94% GS 2036 paper closed at 7.30% in the week ended October 9 against 7.20% the week earlier,driven by the RBI’s policy rate hike, elevated crude oil prices and concerns over inflationary pressures.
- Even as RBI raised the repo rate, fluctuating crude oil prices added to inflation concerns, while expectations of substantial government borrowing raised concerns about its impact on the fiscal position and interest rates.
Source: CRISIL Fixed Income Database, RBI^ Data as of 2nd Oct 2026 vs 25th Sep 2026 vs 4th Sep 2026 respectively
Source: CRISIL Fixed Income Database
Indian equity market updates
- Indian equity benchmarks ended marginally higher on a weekly basis, supported by easing geopolitical concerns. Softer-than-expected US jobs data reduced concerns of an imminent Federal Reserve rate hike which added to the gains. Positive business updates also provided support earlier in the week. The BSE Sensex and Nifty 50 rose 0.78% and 0.44%, respectively.
- Sectoral performance was mixed during the week. The BSE Realty and BSE Metal indices were the top losers, declining 4.19% and 4.18%, respectively, followed by the BSE Auto index, which fell 2.16%. Realty and auto stocks faced pressure from the repo rate hike and tighter stance, which raised concerns over borrowing costs. Metal stocks were weighed down by global growth uncertainty and concerns over demand.
- The BSE FMCG, BSE Bankex, and BSE Information Technology indices gained 2.43%, 1.31%, and 0.76%, respectively, supported by positive corporate business updates and selective buying.
- Weekly flows in equity: Domestic Institutional Investors (DIIs) recorded net inflows of Rs 30,313.48 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 30,294.29 crore.
- MTD trend: DIIs reported net inflows of Rs 40,355.32 crore, whereas FIIs registered net outflows of Rs 44,166.00 crore.
- YTD positioning: DIIs remained net buyers at Rs 6,72,337.71 crore, while FIIs remained net sellers at Rs 3,04,468.00 crore.
Source: BSE, NSE
Source: SEBI, NSE, NSDL
Global Equity market summary
- US stocks ended the week higher, as technology stocks reached record highs supported by lower Treasury yields. Weaker jobs data diminished rate hike expectations, providing more upward momentum.
- Britain's FTSE index ended higher during this week, driven by gains in mining and commodity-related stocks. The index advanced despite higher oil prices and bond yields, as easing geopolitical concerns supported risk sentiment toward the end of the week.
- Japan’s Nikkei index advanced, supported by robust buying in artificial intelligence and semiconductor shares and volatile crude prices. Gains were tempered by profit-taking after the recent rally, uncertainty surrounding the interest-rate outlook, higher global bond yields and geopolitical risks.
- China’s Shanghai index equities edged lower after reopening from the National Day holiday as rising US Treasury yields and renewed US-China tensions pressured sentiment. Technology shares retreated on valuation concerns ahead of earnings. Losses were partly offset by optimism surrounding China-European Union trade negotiations, while investors remained selective amid an uncertain external environment.
- Hong Kong’s Hang Seng index equities posted modest gains for the week, supported by strength in internet, semiconductor and pharmaceutical shares, alongside improved risk appetite as concerns over US monetary tightening eased. Sentiment remained uneven, however, as weaker Chinese economic data and intermittent selling in technology and biotech stocks limited upside.
Source: Websites of respective stock exchanges
Global Yield
- US Treasury yields declined modestly during the week ended October 9, as strong demand at long-dated Treasury auctions prompted investors to add duration after yields rose to multi-decade highs.
- The move was supported by robust demand for the $39 billion 10-year Treasury auction on October 7 and the $22 billion 30-year auction on October 8, both alleviating concerns around the market's ability to absorb elevated government borrowing requirements. Strong participation from foreign and indirect investors reinforced sentiment.
- The decline in yields was limited as investors continued to assess inflation risks from elevated oil prices, large fiscal deficits and the prospect of interest rates remaining higher for longer.
- The US 10-year benchmark Treasury yield ended at 5.24% on October 9 against 5.28% on October 2.
Source: Financial Websites
Commodities and Currency
- Crude oil prices rose during the week on the NYMEX closing at $91.85 per barrel on October 9, 2026, compared to 91.11 per barrel on October 2, 2026, due to the supply concerns amid hurricane-related disruptions.
- Gold rose to Rs 1,49,430 per 10 grams as on October 9 from Rs 1,48,138 as on October 1, supported by safe haven demand.
- Silver increased to Rs 2,21,109 per kg on October 9 against Rs 2,20,829 on October 1, tracking gains in gold amid strong demand.
- The rupee ended lower at Rs 96.61 against the dollar on a weekly basis weighed down by persistent foreign portfolio outflows, a firmer US dollar and cautious investor sentiment. The RBI’s repo rate hike to 5.50% failed to provide sustained support, as investors remained concerned about the policy outlook and continued capital outflows. Elevated crude oil prices and weakness in other Asian currencies added to the pressure, while RBI intervention and a softer dollar towards the end of the week helped limit losses.
Source: Respective commodity exchanges, ibjarates.com
Source: RBI Reference Rate
Global Economic
- The US unemployment rate rose to 4.2% in September 2026, up from 4.1% in August 2026.
- US S&P Global Manufacturing PMI rose to 55.9 in September 2026 compared to 53.9 in August 2026.
- US ISM Manufacturing PMI edged down to 54.5 in September 2026 compared to 54.6 in August 2026.
- Eurozone annual inflation accelerated to 3.8% in September 2026, up from 3.2% in August 2026 while core inflation rate accelerated to 2.5% from 2.4%.
- UK S&P Global Services PMI fell to 52.1 in September 2026 compared to 52.5 in August 2026.
Source: Financial Websites
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