ECONOMIC INTELLIGENCE BRIEF - 3 November 2026

ECONOMIC INTELLIGENCE BRIEF

3 November 2026

• India's manufacturing growth moderates, export orders strengthen

  The HSBC India Manufacturing PMI, compiled by S&P Global, eased to 54.7 in October from 55.1 in September, remaining above the 50-point expansion threshold. Domestic orders and output growth moderated, but export orders recorded their fastest growth in six months. Input-cost inflation also eased.

  Why it matters: Manufacturing remains in expansion, but softer domestic demand and slower hiring warrant attention. Stronger export demand provides a counterbalancing positive signal.

  Source: Reuters, 2 November

• SEBI reportedly recommends capital gains tax relief for foreign investors

  Reuters, citing two people familiar with the matter, reported that SEBI has made confidential, non-binding pre-budget recommendations to abolish long-term capital gains tax on foreign equity investors. It has also reportedly suggested tax relief for domestic mutual fund investors switching schemes after holding units for more than a year.

  Why it matters: If accepted, the proposals could improve post-tax investment returns and influence foreign portfolio flows. These are reported recommendations, not announced government policy.

  Source: Reuters, 2 November

• Banks begin raising deposit rates amid tighter liquidity

  Bank of India increased rates by 10 to 35 basis points on selected deposits with maturities between one and three years. Its special 500-day deposit rate was raised to 6.85%. The Economic Times reports that banking-system liquidity has declined substantially from its September peak, while credit demand remains strong.

  Why it matters: Higher deposit mobilisation costs may influence banks' funding strategies, deposit competition and, over time, lending-rate decisions.

  Source: The Economic Times, 3 November

• IDBI Bank employees observe a two-day strike

  Employees began a strike opposing the proposed sale of the combined 60% government and LIC stake in IDBI Bank to Fairfax Financial Holdings. The bank advised customers to use digital channels, ATMs and customer service points, which it said would remain operational. It also announced free withdrawals at other banks' ATMs during the strike period.

  Why it matters: The development has implications for customer-service continuity and the ongoing strategic disinvestment process.

  Source: The Economic Times, 2 November

• China raises foreign-currency reserve requirement for banks

  The People's Bank of China announced that the foreign-exchange reserve requirement ratio for financial institutions will increase from 4% to 6%, effective 15 November. Reuters estimates that the measure could withdraw around US$24 billion from the financial system.

  Why it matters: The move is intended to manage foreign-currency liquidity and moderate the yuan's recent appreciation. It also illustrates the use of reserve requirements as an instrument of foreign-exchange management.

  Source: Reuters, 3 November

• ECB highlights risks from AI valuations, bond markets and non-bank finance

  European Central Bank Vice-President Boris Vujčić identified elevated AI-related equity valuations, rising government bond yields and potential losses at investment funds and other non-bank financial institutions as key financial-stability risks. The ECB's next Financial Stability Review is scheduled for 18 November.

  Why it matters: The concerns underline the possibility that market corrections and sovereign bond stress could transmit across investment funds and the wider financial system.

  Source: Reuters, 2 November

• Oil prices recover modestly after reports of US strikes on Iran

  Brent crude rose 0.5% to US$105.25 per barrel and WTI rose 0.5% to US$96.93 in early Asian trading. The movement followed a Wall Street Journal report, citing US officials, that the US had struck Iran's Qeshm Island. Reuters reported that the news added a geopolitical risk premium after Brent had fallen 7.63% on Monday.

  Why it matters: Renewed volatility around the Strait of Hormuz remains a significant risk for India's crude import bill, inflation and current account. The reported strike should be distinguished from independently confirmed details of the incident.

  Source: Reuters, 3 November

• South Korea's October inflation moderates to 2.8%

  Government data show consumer inflation eased to 2.8% year-on-year from 2.9% in September. However, it remains above the Bank of Korea's 2% target. A Reuters poll indicates market expectations of further rate increases, but these are forecasts rather than a central-bank commitment.

  Why it matters: The data illustrate the continuing monetary-policy challenge of containing inflation while accounting for energy prices and household borrowing.

  Source: Reuters, 3 November