02/12/2025

BIZ & FINANCE TUESDAY | DEC 2, 2025

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Rupee at record low despite blowout growth print MUMBAI: The Indian rupee fell to a record low yesterday as sluggish trade and portfolio flows, coupled with the lack of a US-India trade deal, overshadowed the impact of stellar economic growth. The rupee declined to 89.7575 against US dollar, dipping past its previous record low of 89.49 hit about two weeks ago. The drop came right after India posted a blowout GDP number that exceeded all expectations. The economy expanded 8.2% in the September quarter. The rupee ranks among Asia’s worst-performing currencies this year despite resilience in domestic economic fundamentals which have boosted shares to record highs. The losses on the rupee would have been larger if not for the regular intervention from the central bank, traders say. Bankers said the robust growth has offered little respite to the currency, which remains pressured by the lack of progress on a US-India trade deal, importer hedging activity, and a balance of payments position that has turned less supportive. The maturity of positions in the non-deliverable forwards market also hurt the rupee, traders said, while state-run banks were spotted offering dollars intermittently. A “calibrated” rupee depreciation is “both inevitable and desirable” in the current macroeconomic environment, economists at J.P. Morgan said in a note. The longer there is no trade deal, the greater the onus on rupee depreciation would be to provide that offset, the economists said. Comments from US and Indian officials last month had raised hopes that the steep 50% tariffs on Indian exports would soon be reduced, but a deal has not been finalised. The US tariffs have dented trade and portfolio flows into Indian equities, leaving the currency reliant on central bank interventions for support. Foreign investors have net pulled out over US$16 billion from Indian shares over the year so far. India’s merchandise trade deficit hit an all-time high in October. The rupee’s rough patch has brought down its 40-currency real effective exchange rate, a measure of competitiveness, to undervaluation territory. At the end of October, the measure stood at 97.47, per central bank data. A level below 100 signals that a currency is undervalued relative to those of its trading partners. Last month, the International Monetary Fund reclassified India’s foreign exchange framework as a “crawl-like arrangement”, noting that “while the exchange rate has exhibited increasing two-way movement this year, there remains room for additional exchange rate flexibility”. – Reuters outage shows that improvements in risk culture take time but we need to see that its risk transformation plan is capable of success.” The ASX disruption comes after US-based CME Group, the world’s largest exchange operator, on Friday suffered one of its longest outages in years, halting trading across stocks, bonds, commodities and currencies. ASIC is engaging with the ASX on the market announcement platform outage, according to a spokesperson at the regulator. – Reuters

Asia’s factories stumble amid global uncertainties

BEIJING: Asia’s manufacturing powerhouses struggled with sluggish demand in November, extending declines in factory activity as progress in US trade negotiations failed to translate into a significant recovery in orders. A raft of purchasing managers’ indexes (PMIs) on Monday showed diverging conditions across the region, with China, Japan, South Korea and Taiwan all reporting declines in activity while Southeast Asian economies mostly saw growth. In China, the world’s largest manufacturer, factory activity slipped back into contraction, a private-sector PMI showed, a day after Beijing’s official measure showed activity falling for the eighth consecutive month albeit at a slower pace. “Container throughput at Chinese ports was little changed last month compared to October. To the extent that demand did improve, it didn’t do much to support production amid already high inventory levels – the output component o Progress in trade negotiations with America fails to revive demand

corporate spending on factories and equipment rose 2.9% in July-September versus the same period a year prior, slowing from the previous quarter. South Korea’s factory activity contracted for a second month in November, though a finalised trade deal with the United States brought some clarity for manufacturers. Separate data showed Korean exports rose in November for a sixth consecutive month, beating market expectations, as chip sales hit a record on strong technology demand while autos also jumped after a US trade deal. Taiwan’s PMI showed factory activity continued to fall, but at a slower pace. Meanwhile, Asia’s emerging-market manufacturers remained outperformers with Indonesia and Vietnam both reporting brisk growth in factory activity and Malaysia swinging back to growth. India’s factory activity growth slowed from October’s strong reading, however the country’s PMI remained well above those of its peers, aligning with other indicators that show strong growth in Asia’s third-largest economy. Gross domestic product in the South Asian nation grew at its fastest pace in 18 months in the July-September period, data released on Friday showed, lifted by robust consumer spending. – Reuters

dropped to a four-month low,” Zichun Huang, China economist at Capital Economics, said in a note. “And while the output price component edged up slightly, it stayed at a low level, pointing to persistent deflationary pressures.” Still, Capital Economics noted a general disconnect between the PMIs and hard trade data from across Asia. “Exports from most of Asia have been surging in recent months and we think the near-term outlook for export-driven manufacturing sectors in the region remains favourable,” Shivaan Tandon, Asia economist at Capital Economics, said in a separate report. Across Asia this year, businesses in major exporting nations have been scrambling to navigate the uncertainty created by US President Donald Trump’s sweeping tariffs. While Trump’s trade deals with countries like Japan and South Korea and lowered tensions with China have given firms some confidence, many are still adjusting to the new US trade reality. Japan’s PMI showed new orders continued to decline, stretching the downturn to two-and-a-half years, blamed on factors such as a sluggish global business environment, tighter client budgets and subdued capital investment. Official data yesterday also showed Japanese

Employees move copper rod on a pallet on the production line for copper flat wire at the Wellascent factory in the China city of Ganzhou. – REUTERSPIC

ASX announcement platform still not fully operational as trading session ends SYDNEY: Embattled stock exchange operator Australian Securities

turnaround plan could not afford to fail, as the exchange battled the regulatory fallout following a 2024 trading settlement delay. Stockbrokers and Investment Advisers Association Chief Executive Judith Fox said the announcement platform malfunction had highlighted the ASX’s operational risk management problems which had concerned the industry group for some time. “There is still substantial work to be done to improve ASX’s risk management framework and today’s

according to an ASX spokesperson. As many as 80 stocks were affected, ASX said. ASX trading and settlement were not impacted. The outage is the latest in a string of problems for the stock exchange operator, which has been criticised by the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia for its performance. ASX chairman David Clarke told ASX investors in October a multi-year

received after 11.22am but there was still a backlog of announcements that were due to be processed. “Earlier announcements remain impacted,” an ASX statement on its website showed, adding the exchange was working towards a full remediation of the issue. The ASX said it did not believe the outage was a cybersecurity-related incident. Companies due to release price-sensitive information during the outage were placed in a trading halt,

Exchange is facing fresh pressure to enact its turnaround plan, after its announcements platform suffered an outage yesterday, forcing about 80 stocks to be placed on a trading halt. The exchange’s announcements platform went down just before 9am and was still not fully operational at the close of trade yesterday at about 4pm. The ASX said it had published some company announcements