Economy and regulatory updates
- The HSBC India Services Purchasing Managers’ Index (PMI) slid to 57.4 in June from 58.9 in May, the composite PMI eased to 57.4 from 59.3 and the manufacturing PMI edged lower to 54.2 from 55.0.
- India’s goods and services tax (GST) collections rose to Rs 1,94,812 crore in June compared with Rs 1,94,184 crore in May, driven by higher imports and strong economic activity.
- The country’s industrial production grew 5.1% in May vs 4.9% in April.
- India’s fiscal deficit widened to Rs 1.62 lakh crores in April-May from Rs 0.13 lakh crores a year earlier. The deficit reached 9.6% of the full-year target, compared with 0.8% in the year-ago period.
- The government has launched the FCRA 2.0 portal and e-OCI (e-Overseas Citizen of India) card services to improve ease of compliance and service delivery for foreign-funded entities and overseas citizens.
- The Reserve Bank of India (RBI) has, from July 1, introduced stricter norms on banks’ exposure to real estate and capital markets, including limits on third-party collateral usage and explicit lending caps, to enhance financial stability and reduce systemic risks.
- The new RBI norms for stockbrokers and proprietary trading mandate full collateral and restricting leverage, which could impact liquidity and trading volumes in derivatives markets.
- RBI proposed a series of measures aimed at improving liquidity and participation in the term money market, while also seeking to streamline rules governing secondary market transactions in government securities.
- Securities and Exchange Board of India (SEBI) has proposed significant governance reforms for alternative investment funds (AIFs), aiming to standardise investor consent, strengthen oversight of conflict-of-interest transactions, and introduce a uniform 75% approval threshold for key decisions, thereby enhancing transparency, consistency, and investor protection.
- SEBI has formed an expert panel to review the debenture trustee framework and strengthen investor protection while improving market efficiency.
Source: MOSPI, RBI
Indian debt market update
- The interbank call money rate ended lower at 5.28% in the week ended July 3 vs 5.40% in the week ended June 25.
- The yield on the 10-year benchmark 6.94% GS 2036 paper slid to 6.71% on July 3 vs 6.79% on June 25, supported by improving domestic liquidity conditions and sustained foreign demand for the government bonds.
- Continued foreign portfolio inflows, aided by expectations of India’s inclusion in the Bloomberg Global Aggregate Bond Index, further supported the bond market.
- Although the sharp rise in US Treasury yields, following the June 2026 US nonfarm payrolls data, capped further gains towards the end of the week, domestic factors kept the benchmark yield lower on a weekly basis.
Source: CRISIL Fixed Income Database, RBI^ Data as of 26th Jun 2026 vs 19th Jun 2026 vs 22nd May 2026 respectively
Source: CRISIL Fixed Income Database
Indian equity market updates
- Indian equities ended the week higher, driven by positive global cues, and growing expectations of a more accommodative global interest-rate environment. Sentiment was further supported by optimism surrounding a potential US-India trade agreement.
- However, the gains were capped by mid-week profit booking. The BSE Sensex and the Nifty 50 advanced 0.86% and 0.89%, respectively.
- Sectoral performance was largely positive during the week. Realty, healthcare and consumer durables stocks outperformed, supported by a favourable interest-rate outlook that improved demand expectations. The BSE Realty, BSE Healthcare and BSE Consumer Durables indices gained 7.81%, 3.14% and 2.24%, respectively.
- On the downside, the capital goods sector was the worst performer, declining 2.71% amid profit booking.
- Weekly flows: Domestic Institutional Investors (DIIs) recorded net outflows of Rs 1,953.89 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 311.82 crore.
- MTD trend: DIIs reported net inflows of Rs 2989.75 crore, whereas FIIs registered net outflows of Rs 96.99 crore.
- YTD positioning: DIIs remained net buyers at Rs 4,65,574.45 crore, while FIIs stand as net sellers at Rs 3,38,385.11 crore.
Source: BSE, NSE
Source: SEBI, NSE, NSDL
Global Equity market summary
- US stocks ended higher during this week, as softer labor market data for June strengthened expectations of a Federal Reserve rate cut. Technology shares supported the gains, though persistent weakness in artificial intelligence (AI)-linked chipmakers limited the upside. Industrials outperformed due to confidence in earnings and macro stability.
- Britain’s FTSE index ended the week higher, supported by improving risk sentiment as softer US labour data boosted expectations of a less restrictive rate environment. Defence and financial stocks benefited from optimism over a ceasefire in West Asia, driving a broad-based rally. However, weakness in energy, mining and healthcare shares tempered gains.
- Asian equities ended higher. Japan’s Nikkei ended higher this week as softer US nonfarm payroll data eased fears of a Fed rate hike. Improved services activity in June and strengthening of export-oriented sectors, due to weakness in the yen, also contributed to the rise. Technology, AI and semiconductor stocks remained key market drivers, although periodic profit-taking and cautious broader sentiment limited gains and kept trading conditions mixed.
- Hong Kong equities ended the week higher, supported by gains in consumer and healthcare stocks. Expectations of a supportive monetary policy backdrop improved investor sentiment. However, the gains were partially offset by weakness in property and technology stocks.
- China’s Shanghai Composite closed higher due to strong factory activity in June, resilient demand for high-tech exports and policy support for high-quality development. Gains in technology, semiconductor, healthcare and consumer sectors improved sentiment.
Source: Websites of respective stock exchanges; *Data as of July 2
Global Yield
- US 10-year treasury yields rose during the week as investors reassessed the outlook for the Fed’s policy amid a series of economic releases that pointed to the resilience of the US economy.
- During the week, yields were initially supported by easing geopolitical tensions in West Asia and the softer-than-expected May 2026 Personal Consumption Expenditures inflation data, which reinforced expectations of moderating inflation.
- However, yields rose after the Fed officials reiterated a cautious approach towards policy easing. Towards the end of the week, the June nonfarm payrolls report and a decline in the month’s unemployment rate prompted investors to pare expectations of a rate cut by the Fed in the near term, pushing yields higher.
- The benchmark US 10-year Treasury yield rose to 4.49% on July 2 from 4.38% on June 26.
Source: Financial Websites, *Data as of July 2
Commodities and Currency
- Crude oil prices fell during the week on the NYMEX to $68.69 per barrel in the week ended 2, July 2026 compared with $69.23 per barrel in the week ended 26, June 2026, as easing geopolitical tensions reduced supply risks. Progress in US-Iran talks and steady crude flows through the Strait of Hormuz helped calm market concerns, leading to a drop in prices.
- Gold prices rose to Rs 1,46,344 per 10 gram on July 3 from Rs 1,39,873 on June 25 due to a softer dollar index.
- Silver prices increased to Rs 2,33,858 per kg on July 3 vs Rs 2,16,541 on June 25, tracking the rise in gold prices amid strong industrial demand and improved market sentiment.
- The rupee ended the week marginally lower at Rs 95.24 against the US dollar, weighed down by persistent demand from importers for dollars. However, the losses were partially offset by equity inflows, softer crude oil prices and support from the RBI.
Source: Respective commodity exchanges, ibjarates.com, *Data as of July 2
Source: RBI Reference Rate
Global Economic
- US Non-Farm Payrolls (NFP) increased by 57,000 jobs in June 2026, following a gain of 129,000 jobs in May 2026.
- US ISM Manufacturing PMI decreased to 53.3 in June 2026 compared to 54.0 in May 2026.
- Eurozone S&P Global Manufacturing PMI eased to 51.4 in June 2026 compared to 51.6 in May 2026.
- Eurozone consumer price inflation dropped to 2.8% in June 2026, compared to 3.2% in May 2026 while the core consumer inflation rate dropped to 2.4% in June of 2026 from 2.6%.
- The British economy grew 0.9% year-on-year in Q1 2026, matching the pace recorded in the previous quarter.
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