Economy and regulatory updates
- The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) voted unanimously to keep the repo rate unchanged at 5.25%.
- The RBI has projected India’s real gross domestic product (GDP) growth for fiscal 2027 at 6.6%: 6.6% in the first quarter, 6.3% in second, 6.5% in third and 6.8% in the fourth quarter.
- The RBI projected Consumer Price Index-based inflation for fiscal 2027 at 5.1%: 4.2% in the first quarter, 5.1% in second, 5.9% in third and 5.4% in fourth quarter.
- According to government data released by the National Statistical Office (NSO), India’s real GDP expanded 7.8% on year in the March quarter of 2026, easing slightly from the earlier period’s upwardly revised 8% growth.
- India gross goods and services tax collection for May 2026 stood at Rs 1.94 lakh crore, rising 3.2% on year, driven by higher goods and services supplies, stronger import tax collections and resilient domestic demand.
- India industrial output grew 4.9% in April 2026 from 4.1% in March 2026, driven by robust manufacturing despite energy price pressures and rupee volatility.
- India and Oman's Comprehensive Economic Partnership Agreement (CEPA) commenced on June 1, 2026, enhancing trade, energy security and opening up opportunities for Indian exporters. It positions Oman as a key gateway for India's energy and supply chains in the Gulf region.
- India HSBC Manufacturing Purchasing Managers' Index (PMI) rose to 55.0 in May 2026 from 54.7 in April 2026. India HSBC Services PMI edged up to 59.8 in May 2026 vs 58.8 in April 2026 and the HSBC Composite PMI rose to 59.3 from 58.2.
- India will introduce a new Producer Price Index and a revamped Wholesale Price Index from June 15, aiming to align with global standards and enhance the accuracy of price trend tracking.
- The Securities and Exchange Board of India (SEBI) has relaxed nomination norms for demat accounts and mutual fund folios, making the process simpler for investors, while continuing its push to reduce the buildup of unclaimed financial assets.
Source: MOSPI, RBI
Indian debt market update
- The interbank call money rate ended lower at 5.35% in the week ended June 5 compared with 5.55% in the week ended May 29.
- The yield on the 10-year benchmark 6.48% GS 2035 paper closed lower at 6.98% on June 5 vs 7.00% on May 29.
- Yield declined sharply after the central bank, in its policy meet on June 5, 2026, kept interest rates unchanged and announced measures to attract foreign capital into local debt and equities.
- However, the decline in yields was partly capped by a rise in global crude oil prices amid escalating geopolitical tensions in the Middle East, which raised concerns over potential inflationary pressures.
- Next week, debt investors will focus on India's CPI inflation for May 2026 and Index of Industrial Production (IIP) growth for April 2026 to track the economic outlook scenario. Global crude oil prices and US Treasury yield movements will remain key external drivers for the domestic bond market.
Source: CRISIL Fixed Income Database, RBI *Weighted Average Yield ^ Data as of 29th May 2026 vs 22nd May 2026 vs 24th Apr 2026 respectively
Source: CRISIL Fixed Income Database; *Weighted Average Yield
Indian equity market updates
- Indian equities ended marginally lower during the week as caution around the RBI policy and its downward revision in growth forecast weighed on sentiment. Further losses were seen due to persistent foreign fund outflows, volatile oil prices and profit-booking in IT stocks. The BSE Sensex and Nifty 50 fell 0.71% and 0.77%, respectively.
- Most of the sectors ended lower this week. Power, realty and fast-moving consumer goods (FMCG) declined the most on profit-booking. BSE Power, BSE Realty and BSE FMCG fell 2.96%, 1.95% and 1.85%, respectively.
- Consumer durables (CD), bank and healthcare indices gained during the week on support from a relatively stable earnings outlook. BSE CD, BSE Bankex and BSE Healthcare gained 1.68%, 0.57% and 0.22%, respectively.
- Weekly flows: Domestic Institutional Investors (DIIs) recorded net inflows of Rs 50,193.33 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 42,974.85 crore.
- MTD trend: DIIs reported net inflows of Rs 33,933.05 crore, whereas FIIs registered net outflows of Rs 22,338.22 crore.
- YTD positioning: DIIs remained net buyers at Rs 4,10,717.66 crore, while FIIs stand as net sellers at Rs 3,20,373.96 crore.
Source: BSE, NSE
Source: SEBI, NSE
Global Equity market summary
- US equity markets fell during the week on concerns that interest rates in US may remain at higher levels for an extended period after US jobs report for May 2026 came better than expected.
- Britain’s FTSE 100 declined during the week as Middle East tensions weighed on risk appetite and dampened broader market sentiment. Early weakness reflected concerns over the conflict’s economic fallout, although gains in cyclical sectors, including miners and banks, provided intermittent support.
- Japan’s Nikkei ended higher, supported by a surge in semiconductor and banking stocks. Meanwhile, investor caution persisted amid geopolitical uncertainty related to peace talks in the Middle East, capping further upside.
- Hong Kong’s Hang Seng Index ended lower this week, pressured by weakness in technology and property stocks amid concerns over China's economic outlook. Sentiment was further impacted by China's weak manufacturing PMI number for May.
- China’s Shanghai Composite Index closed lower this week due to concerns over the pace of China's economic recovery and continued weakness in the property sector.
Source: Websites of respective stock exchanges;
Global Yield
- The US 10-year Treasury yield edged up during the week as investors reassessed the interest-rate outlook following the release of a series of resilient economic data and persistent inflation concerns linked to geopolitical tensions in the Middle East.
- During the week, yields were supported by stronger-than-expected economic indicators. The ISM Services PMI rose to 54.5 in May 2026 from 53.6 in April, indicating continued expansion in the services sector, while the ADP Employment Report showed private payrolls increased 122,000 in May 2026. These data points reinforced expectations that the Federal Reserve (Fed) may maintain a higher-for-longer interest rate stance.
- The benchmark US 10-year Treasury yield rose to 4.55% on June 5, 2026, from 4.45% on May 29, 2026.
Source: Financial Websites
Commodities and Currency
- Crude oil prices rose during the week on the NYMEX to $90.54 per barrel in the week ended 5, June 2026 compared with $87.36 per barrel in the week ended 29, May 2026, amid rising geopolitical tensions and concerns over potential blockade of the Strait of Hormuz.
- Gold prices ended lower this week to Rs 1,54,238 per 10 grams in the week ended June 5 from Rs 1,56,463 per 10 grams in week ended May 29, dragged down due to a stronger dollar index.
- Silver prices edged down to Rs 2,56,908 per kg in the week ended June 5 from Rs 2,63,350 per kg in the week ended May 29, mirroring the trend in gold amid a softer industrial demand.
- The rupee ended the week marginally lower at Rs 95.40 against the United States (US) dollar. Losses were driven by pressure from volatile oil prices, rising dollar demand, and foreign fund outflows.
Source: Respective commodity exchanges, ibjarates.com
Source: RBI Reference Rate
Global Economic
- US S&P Global Manufacturing PMI rose to 55.1 in May 2026 from 54.5 in April 2026.
- Eurozone retail sales eased to 1.0% in April 2026 from 2.1% in March 2026.
- UK S&P Global Manufacturing PMI rose to 53.9 in May 2026 from 53.7 in April 2026.
- China NBS General PMI increased to 50.5 in May 2026 from 50.1 in April 2026.
- Japan industrial production rose 2.3% in April 2026 from 2.4% in March 2026.
Source: Financial Websites
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