Weekly Synopsis

 Indian Rupee

The Indian rupee fell against the U.S. currency this week, weighed down by broad dollar strength and the risk-off mood in Asia on continuing uncertainty over the much-awaited U.S. fiscal stimulus package. The local unit fell 0.3% this week. Rupee closed this week at 73.34 compare to previous week close of 73.13.

India’s foreign exchange reserves rose for the second straight week to hit a fresh record high of $551.51 billion as of the week ended Oct. 9, from $545.64 billion in the prior week. The reserves jumped by $5.87 billion last week, the biggest jump since week ended Jul. 31, RBI data showed. The rise was mainly due to a gain in foreign currency assets that climbed to $508.78 billion from $503.05 billion in the previous week.

Global Market

The dollar edged lower against a basket of currencies on Friday, paring some of the week's gains built on increased caution over a global surge in coronavirus cases and fading prospects for a U.S. stimulus package before the Nov. 3 election. The index is up 0.7%, for the week, its best weekly gain in three weeks. Dollar Index closed this week at 93.69 compare to previous week close of 93.03.

U.S. consumer sentiment inched up to a seven-month high in early October as an uptick in expectations for better economic prospects in the future outweighed a reversal in assessments of current conditions, The University of Michigan's Surveys of Consumers said its preliminary index reading for October climbed to 81.2 from a final September level of 80.4.

The number of Americans applying for initial unemployment benefits unexpectedly increased to 898,000 last week, its highest since late August, compounding fears that the recovery in the labor market is stalling. Economists had forecast a decline to 825,000. The prior week's figure was revised up to 845,000 from an initially reported 840,000.

U.S. factory production unexpectedly fell in September, suggesting that manufacturing's recovery from the COVID-19 pandemic was slowing heading into the fourth quarter. Manufacturing production dropped 0.3% last month, the Federal Reserve said on Friday. Data for August was revised up to show to output at factories increasing 1.2% instead of 1.0% as previously reported.

European car registrations rose slightly in September, the first increase this year, industry data showed, suggesting a recovery in the auto sector in some European markets where coronavirus infections were lower. In September, new car registrations rose by 1.1% year-on-year to 1.3 million vehicles in the European Union, Britain and the European Free Trade Association (EFTA) countries, statistics from the European Automobile Manufacturers' Association (ACEA) showed.

Shopper numbers across British retail destinations fell marginally in the week to Oct. 10, the second complete week of the government imposed 10 pm closure of hospitality outlets, market researcher Springboard said on Monday. Footfall was down 0.3% versus the previous week. It rose by 0.1% in high streets versus the week before and 0.4% in shopping centres but declined 1.6% in retail parks.

China's trade surplus with the United States stood at $30.75 billion in September, Reuters calculations based on Chinese customs data showed on Tuesday, down from a $34.24 billion surplus a month earlier. For the first nine months of the year, China's trade surplus with the United States totalled $218.57 billion.

Japanese wholesale prices fell 0.8% in September from the same month a year earlier, data showed on Monday, marking the seventh straight month of year-on-year declines and heightening the risk the country will slide back into deflation. Wholesale prices also slid 0.2% in September from August, marking the first on-month drop in four months, the data released by the Bank of Japan (BOJ) showed.

Local Market

Indian shares ended higher on Friday, as metal stocks gained and banks rebounded from losses in the previous session, although the Nifty 50 snapped a two-week winning streak. Both indexes ended the week 1.3% lower as profit-booking in banking and IT stocks on Thursday, along with a global sell-off driven by concerns over coronavirus cases in Europe and a stalled U.S. stimulus deal, ended Indian equities’ longest gaining streak in nearly six years. Nifty50 closed this week at 11762.45.

Foreign investors sold net $40.00 million worth of Indian shares on Oct. 15, according to data from the National Securities Depository Ltd. So far in October, these investors bought shares worth net $1.20 billion.