A significant selloff in semiconductor stocks affected major US indexes amid rising concerns regarding AI investment returns. The Nasdaq 100 dropped by 1.8%, continuing its longest losing streak since 2008. Market participants are questioning if AI infrastructure investments will yield profitable returns despite strong demand for chips. Federal Reserve Chairman Kevin Warsh maintained a neutral stance on interest rates during discussions at the IMF meetings.

India's foreign exchange reserves fell by nearly $60 billion in the six weeks to October 9 to $726.027 billion, driven largely by the central bank's dollar sales to defend the rupee. The rupee is among Asia's worst-performing currencies this year, pressured by higher crude oil prices, rising US Treasury yields and foreign investor outflows. Foreign currency assets and gold reserves also posted significant declines in the reporting week.

Wipro reported a 9.1% year-on-year rise in Q2FY27 revenue to Rs 24,752.7 crore, while net profit fell 1.9% to Rs 3,201 crore. The IT major expects Q3 revenue growth of -1.5% to 0.5% sequentially in constant currency terms. Nomura retained its Buy rating with a Rs 200 target, citing a slight revenue beat and confidence in delayed large deals closing.

In September, US wholesale prices rose sharply by 1.3%, fueled by a significant increase in gasoline costs, marking the biggest monthly gain since March 2022. The Producer Price Index saw a 6.3% year-over-year rise, indicating broader inflation pressures across goods and services. Learn more about the impact on the economy and Federal Reserve interest rate decisions.

Although shares in companies driving the AI boom are still among the biggest gainers on global equity markets this year, many have fallen sharply in the past few weeks, as investors reassess the cost of capital against a backdrop of rising interest rates and inflation.

Emerging Asian currencies weakened as hotter-than-expected US inflation revived Federal Reserve rate hike concerns, boosting the dollar and triggering a sell-off in AI-linked stocks. South Korea's won, Taiwan dollar, Philippine peso and Indonesian rupiah came under pressure amid capital outflows and rising borrowing costs.

Japans Nikkei 225 plunged, while the broader Topix fell 2.5%, as AI-linked stocks led a broad selloff. Sentiment was hit by concerns over the financial health of US cloud-computing firm CoreWeave and fears of higher interest rates following hotter-than-expected US inflation data, Reuters reported. Chip equipment makers Advantest and Tokyo Electron tumbled 13.9% and 7.3%, respectively, while SoftBank Group slid 9.4%.

The dollar has fallen back after peaking at an 18-month high, fueled by stronger than expected inflation data. Expectations of an October rate hike were moderated by prudent remarks from Federal Reserve officials. With Treasury yields decreasing, the dollar slipped against key currencies like the euro and sterling. Traders are now closely monitoring the upcoming US producer price and retail sales figures to gauge future market movements.

Spot gold steadied at $4,114.57 an ounce after touching a one-week low. US gold futures for December delivery rose 0.7% to $4,136.10. US consumer prices picked up on costlier gasoline, lifting the probability of a Federal Reserve rate hike this month to 32% from 22%. San Francisco Fed President Mary Daly said further rate increases may be needed while signaling no move at the October meeting, as investors await upcoming US economic data.