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Morning News Call - India, October 22

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GMF: SOUTH CHINA SEA FOCUS Dhruva Jaishankar, Fellow in Foreign Policy Studies at Brookings India and the Brookings Institution in Washington DC, joins us at 1030 IST. To join the conversation, click on the link: https://forms.thomsonreuters.com/communities/ INDIA TOP NEWS • India rate setters highlight inflation spike risk, signal rate hikes India's interest rate setting committee sees a risk of rising headline inflation from high crude oil prices and a weak rupee, indicating potential rate hikes ahead even as it held rates unchanged at its last meeting.

• India central bank objects to payments regulator outside its control India's central bank issued a rare public objection on Friday to a government-led panel's recommendation for payments systems to be overseen by a regulator that would be set up outside the central bank's control.

• HDFC Bank reports record profit for July-Sept quarter HDFC Bank has reported record profit for the three months ending Sept. 30 broadly in line with expectations, helped by higher interest and fee income.

• India's cenbank eases bank lending limits to some non-banking finance firms The Reserve Bank of India on Friday eased lending norms related to certain non-banking finance companies (NBFCs) as liquidity concerns in the sector persist and markets continue to question the viability of some of the firms following the IL&FS debacle.

• Reliance shares slide on debt, delay in key project Shares in India's Reliance Industries dropped as much as 7 percent on Friday, the first trading session after it reported record second-quarter results, weighed down by the company's heavy debt and a delay in a key refining project.

• Yes Bank falls after RBI again says no to CEO's term extension Shares in Yes Bank tanked more than 8 percent on Friday after the Reserve Bank of India (RBI) denied its request for a second time on Wednesday to extend Chief Executive Rana Kapoor's term.

• UltraTech Cement quarterly profit falls, misses expectations Cement maker UltraTech Cement's quarterly profit dropped 9.4 percent and missed market expectations, hurt by higher expenses, the company's statement showed on Friday.

GLOBAL TOP NEWS • Saudi Arabia calls Khashoggi killing 'grave mistake,' says prince not aware Saudi Arabia on Sunday called the killing of journalist Jamal Khashoggi at its Istanbul consulate a "huge and grave mistake," but sought to shield its powerful crown prince from the widening crisis, saying Mohammed bin Salman had not been aware.

• Trump says U.S. to exit landmark nuclear arms pact, Russia threatens retaliation President Donald Trump said Washington would withdraw from a landmark Cold War-era treaty that eliminated nuclear missiles from Europe because Russia was violating the pact, triggering a warning of retaliatory measures from Moscow.

• China's Sept new home price gains led by smaller cities China's new home prices increased at a firm pace in September, supported by gains in smaller cities and showing the market remained resilient despite pressures from softer investment, a slowing economy and government curbs on the sector.

LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were 0.1 percent lower at 10,316, from its previous close.

• The Indian rupee is expected to open lower against the dollar amid the largest fall in the country’s foreign exchange reserves in seven years and firm U.S. yields.

• Indian government bonds may edge lower in early trade today as the local currency might depreciate against the dollar. The yield on the benchmark 7.17 percent bond maturing in 2028 may trade in a 7.90 percent-7.95 percent band today.

GLOBAL MARKETS • The U.S. benchmark S&P 500 stock index edged lower on Friday as strong earnings from Procter & Gamble were offset by ongoing concerns about rising interest rates and tensions over trade policy denting economic growth.

• Asian share markets pared early losses as Chinese stocks swung higher for a second session and helped offset geopolitical concerns over Saudi Arabia, Italy and Brexit.

• The euro and the British pound edged down against the dollar as investors awaited developments around Brexit as well as Italy's budget plan which drew heavy criticism from the European Union.

• U.S. Treasury yields rose on Friday, with the 10-year yield hovering near a one-week high as traders pared safe-haven bond positions stemming from hopes for reduced tension between Italy and the European Commission over the country's debt-laden budget.

• Oil prices edged up, as markets were expected to tighten once U.S. sanctions against Iran's crude exports are implemented next month.

• Gold prices edged higher, moving closer to a 2-1/2-month peak hit last week, as Asian shares fell amid rising political tensions and worries over slowing global economic growth.

CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 73.45/73.48 October 19 -$8.23 mln -$79.02 mln 10-yr bond yield 7.92 pct Month-to-date -$2.46 bln -$1.70 bln Year-to-date -$4.63 bln -$8.45 bln For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 73.3700 Indian rupees) (Compiled by Debanjan Bose in Bengaluru)