Economy and Regulatory Updates
- India’s retail inflation accelerated to 4.38% in June compared with 3.93% in May as transportation and food became expensive due to rising energy prices and a sharp rise in the costs of items such as ginger and tomatoes.
- Inflation measured by the Wholesale Price Index in India increased to 9.87% in June vs 9.68% in May.
- The country’s merchandise trade deficit widened to $30.43 billion in June from $19.12 billion a year earlier as imports surged 31% to $70.84 billion, on higher energy costs amid the uncertainties in West Asia, while exports rose 15.5% to $40.4 billion.
- The World Bank Group has approved an $890 million financing package for the rooftop solar programme, PM Surya Ghar Muft Bijli Yojana.
- The government has launched the EPFO Amnesty Scheme 2026 for provident fund (PF) trusts, providing eligible establishments an opportunity to regularise compliance-related issues and streamline PF administration.
- The Reserve Bank of India (RBI) has stepped up scrutiny of overseas investments by Indian companies by intensifying monitoring of outbound foreign direct investment (OFDI) transactions to ensure compliance with foreign exchange regulations and assess associated financial risks.
- The RBI has proposed a one-time approval framework allowing mutual funds and insurance companies to raise their shareholding in banks beyond the existing limits, reducing the need for repeated regulatory approvals and easing compliance for institutional investors while maintaining oversight of ownership structures in the banking sector.
- The Securities and Exchange Board of India (Sebi) has permitted mutual funds to use intraday borrowing facilities to manage short-term liquidity mismatches arising from differences in the timings of market settlements. The new framework will come into effect on September 1.
- The Sebi has tightened employee conduct and conflict-of-interest norms by introducing a two-year cooling-off period for former employees, expanding disclosure requirements and restricting direct equity investments.
Source: MOSPI, RBI
Indian debt market update
- The interbank call money rate ended at 5.40% on July 17 vs 5.35% on July 10.
- The yield on the 10-year benchmark 6.94% GS 2036 paper closed at 6.77% on July 17 vs 6.71% on July 10.
- The rise in yield was primarily driven by higher crude oil prices and concerns that the escalating conflict in West Asia could disrupt global energy supplies, leading to upside risks to inflation. Given India’s dependence on crude oil imports, the increase in oil prices weighed on sentiment and prompted investors to demand higher yields.
- Although softer-than-expected US inflation and producer price data eased expectations of imminent rate hikes by the Federal Reserve (Fed) and provided some support to global bond markets, these factors were insufficient to offset concerns around oil-led inflation pressures.
Source: CRISIL Fixed Income Database, RBI ^Data as of 10th Jul 2026 vs 3rd Jul 2026 vs 5th Jun 2026 respectively
Source: CRISIL Fixed Income Database
Indian equity market updates
- Indian equities ended the week marginally higher, supported by optimism around earnings for the first quarter of fiscal 2027, value buying in selected stocks and softer-than-expected US inflation data. However, gains remained limited due to persistent geopolitical uncertainties in West Asia, rising crude oil prices and higher-than expected domestic inflation, which weighed on investor sentiment earlier in the week. The BSE Sensex and Nifty 50 gained 0.75% and 0.53%, respectively.
- Sectoral performance was mixed during the week. BSE Information Technology (IT), BSE Consumer Durables (CD) and BSE Oil & Gas emerged as the top gainers, advancing 3.73%, 2.23% and 0.81%, respectively, supported by optimism around earnings and improving sentiment.
- On the other hand, BSE Realty, BSE Metal and BSE Capital Goods (CG) indices declined 2.09%, 1.71% and 1.24%, respectively, amid profit booking as investors were cautious due to geopolitical worries.
- Weekly flows: Domestic Institutional Investors (DIIs) recorded net inflows of Rs 9,808.64 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 9,119.76 crore.
- MTD trend: DIIs reported net inflows of Rs 21,074.01 crore, whereas FIIs registered net inflows of Rs 4,546.87 crore.
- YTD positioning: DIIs remained net buyers at Rs 4,83,658.71 crore, while FIIs stand as net sellers at Rs 3,42,834.99 crore.
Source: BSE, NSE
Source: SEBI, NSE, NSDL
Global Equity market summary
- US stocks declined during the week, with technology shares causing most of the weakness amid rising tensions in West Asia and heightened geopolitical risk. However, there were some gains due to upbeat US inflation readings and producer prices in June, which raised expectations of Fed cutting rates and a strong start to the second quarter earnings season.
- Britain’s FTSE index ended the week higher, supported by strength in the shares of communication, energy and consumer staple companies. The gains were supported by a softer-than-expected US inflation reading for June, which raised expectations of Fed rate cuts. However, weakness in metals prices and escalating tensions in West Asia weighed on sentiment and limited broader market advances.
- Japan’s Nikkei ended lower this week as concerns over artificial intelligence valuations, rising tensions in West Asia and higher crude oil prices weighed on risk appetite.
- Hong Kong’s Hang Seng Index ended higher this week, supported by improved investor sentiment and broad-based buying across key sectors, with technology and healthcare stocks leading gains.
- China’s Shanghai Composite Index closed lower this week as liquidity concerns, geopolitical tensions and weak technology sentiment weighed on investor confidence. A weaker-than-expected gross domestic product (GDP) reading for the second quarter and profit booking also kept the market under pressure.
Source: Websites of respective stock exchanges
Global Yield
- US Treasury yield ended almost flat during the week as investors balanced easing inflation expectations against persistent geopolitical risks and signs of resilience in the US economy.
- The US Consumer Price Index (CPI) and the Producer Price Index (PPI) readings for the month of June, indicated that inflationary pressures remained broadly contained and supporting expectations of policy easing by the Fed. At the same time, escalating tensions in West Asia pushed crude oil prices higher, reviving concerns over inflation. As a result, investors remained cautious, limiting any significant decline in Treasury yields.
- The US 10-year Treasury yield ended marginally lower at 4.55% on July 17 compared with 4.56% on July 10.
Source: Financial Websites
Commodities and Currency
- Crude oil prices strengthened during the week on the NYMEX to $82.49 per barrel in the week ended July 17, 2026, compared with $71.41 per barrel in the week ended 10, July 2026, as escalating geopolitical uncertainties raised concerns over potential supply disruptions through the Strait of Hormuz.
- Gold prices declined to Rs 1,41,159 per 10 gram on July 17, from Rs 1,43,368 per 10 gram on July 10, due to a stronger dollar and easing domestic demand.
- Silver prices decreased to Rs 2,15,474 per kg on July 17, compared with Rs 2,20,390 per kg on July 10, as industrial demand became weaker.
- The rupee ended the week lower at Rs 96.37 against the US dollar, pressured by escalating tensions in West Asia, crude oil price movement and persistent demand for the greenback from importers. However, likely RBI intervention and dollar sales by state-run banks helped cushion the downside.
Source: Respective commodity exchanges, ibjarates.com
Source: RBI Reference Rate
Global Economic
- US annual inflation rate fell to 3.5% in June 2026 compared to 4.2% in May 2026 while the core inflation rate eased to 2.6% from 2.9%.
- Eurozone industrial production declined 1.2% in May 2026, following a 0.4% increase in April 2026.
- UK industrial production increased 1.0% in May 2026, compared to a revised flat reading in April 2026.
- The Chinese economy grew 4.3% in Q2 2026, compared to the 5.0% pace seen in the first quarter of 2026.
- China industrial production increased 5.3% in June 2026, compared to 4.5% growth in May 2026.
- Japan’s industrial production declined 2.1% in May 2026, compared to a 2.0% increase in April 2026.
Source: Financial Websites
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