conomy and regulatory updates
- India's core infrastructure output grew 1.7% in April compared with an upwardly revised 1.2% in March 2026, driven by higher cement, steel and electricity production, indicating steady industrial activity.
- The HSBC Flash India Manufacturing PMI fell to 54.3 in May compared with 54.7 in April, while the HSBC Flash Services PMI rose to 58.9 from 58.8 and the HSBC Flash Composite PMI edged down to 58.1 from 58.2.
- India merchandise trade deficit widened to $28.38 billion in April vs $20.67 billion in March as the West Asia conflict disrupted shipments and elevated energy costs, leading to higher imports of $71.94 billion against exports of $43.56 billion.
- India and the UAE signed six agreements to strengthen their energy and defence cooperation during Prime Minister Narendra Modi’s visit to Abu Dhabi, with the UAE also committing $5 billion in investments into India.
- The Reserve Bank of India (RBI) proposed a revised disclosure framework for banks under Basel III norms, requiring lenders to disclose and publish more granular information on capital adequacy, leverage, liquidity and risk exposure to improve transparency and market discipline.
- The RBI has proposed to allow lenders to disable certain functions of a mobile phone in cases where borrowers default on loans taken to finance the device, as part of a broader overhaul of recovery practices and borrower protection norms.
- The Securities and Exchange Board of India (SEBI) floated a draft framework to permit certain forms of third-party payments in mutual funds, a significant move from the existing regime that requires investments to originate strictly from an investor’s own bank account.
- SEBI clarified that clients of non-discretionary portfolio management services can pledge their securities to obtain loans, provided the pledge is initiated solely at their own discretion.
- SEBI eased onboarding norms for foreign portfolio investors by simplifying PAN allotment requirements, following operational challenges under the new Income-tax Rules, 2026.
- SEBI proposed easing compliance requirements for research analysts by exempting them from maintaining call recordings of interactions with institutional investors.
- SEBI proposed a review of the pre-open call auction session for IPOs and relisted stocks to address current rules involving dummy price bands and base price calculations that suppress prices.
Source: MOSPI, RBI
Indian debt market update
- The interbank call money rate closed at 5.37% in the week ended May 22 compared with 5.23% in the previous week.
- India’s benchmark 10-year 6.48% GS 2035 yield rose marginally to 7.09% on May 22 from 7.06% a week earlier, reflecting cautious market sentiment amid expectations of possible RBI measures to support the rupee and concerns over domestic fiscal dynamics.
- Earlier in the week, benchmark yields softened following reports of potential US-Iran negotiations, which alleviated crude oil price concerns and eased worries around imported inflation and India’s macroeconomic outlook.
Source: CRISIL Fixed Income Database, RBI *Weighted Average Yield ^ Data as of 8th May 2026 vs 1st May 2026 vs 3rd Apr 2026 respectively
Source: CRISIL Fixed Income Database; *Weighted Average Yield
Indian equity market updates
- Indian equities closed marginally higher during the week, supported by an intermittent fall in crude oil prices and positive global cues, as softer US inflation data strengthened expectations of a less restrictive Federal Reserve (Fed) policy stance, improving investor appetite for emerging market assets. However, gains were limited by concerns surrounding the domestic growth and policy outlook. The BSE Sensex and Nifty gained 0.24% and 0.32%, respectively.
- Most of the sectors closed higher, with Information Technology (IT) and Realty and Capital Goods (CG) gaining the most. BSE IT, BSE Realty and BSE CG rose 4.08%, 2.30% and 1.94%, respectively.
- Weekly flows: Domestic Institutional Investors (DIIs) recorded net inflows of Rs 14,989.28 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 6,243.66 crore.
- MTD trend: DIIs reported net inflows of Rs 56,865.46 crore, whereas FIIs registered net outflows of Rs 32,228.65 crore.
- YTD positioning: DIIs remained net buyers at Rs 3,51,485.02 crore, while FIIs stand as net sellers at Rs 2,65,994.04 crore.
Source: BSE, NSE
Source: SEBI, NSE
Global Equity market summary
- US equities finished the week on a positive note, supported by AI optimism and strength in technology stocks, despite mid-week pressure from inflation concerns linked to oil price volatility, fluctuating Treasury yields, and profit-booking.
- Britain's FTSE index closed the week higher, supported by easing inflation data in April, positive labour data for March and lower oil prices. However, gains were capped due to worries around domestic political uncertainties and rising bond yields.
- Japan's Nikkei index closed higher with gains powered by decisive AI and technology stocks. Reports of peace talks between the US and Iran also provided support to markets.
- Hong Kong's Hang Seng Index closed lower due to weak Chinese retail and industrial data for April, with financial and technology stocks weighing on the market. Gains in technology stocks provided some relief.
- China's Shanghai Composite Index closed lower after data showed lost growth momentum in April, with industrial output and retail sales easing. Increasing concerns that central banks may tighten policy further to contain inflation pressures also kept market under pressure.
Source: Websites of respective stock exchanges;
Global Yield
- US 10-year Treasury yields fell marginally during the week.
- Yields initially moved higher following stronger-than-expected US economic data, particularly resilient retail sales in April, which reinforced concerns that underlying inflationary pressures may remain sticky. In addition, cautious commentary from Fed officials regarding premature rate cuts continued to support the “higher-for-longer” interest rate narrative, keeping the yield elevated.
- However, the yield eased later in the week as markets absorbed concerns surrounding the US fiscal outlook. Investors also reassessed the sustainability of recent yield increases amid uncertainty over the pace of economic growth.
- The yield on the 10-year benchmark treasury bond ended at 4.56% on May 22 compared with 4.59% on May 15.
Source: Financial Websites
Commodities and Currency
- Crude oil prices declined during the week on the NYMEX to $96.60 per barrel on the NYMEX on week on 22, May 2026 from $105.42 on 15, May 2026 amid reports of a peace deal between the US and Iran, which eased supply disruption fears.
- Gold prices fell this week Rs 1,58,117 per 10 grams in week on 22, May 2026 from Rs 1,58,210 per 10 grams in week on 15, May 2026 due to profit booking at higher level and strong dollar index.
- Silver prices edged down to Rs 2,66,000 per kg on week on 22, May 2026 from Rs 2,68,500 per kg on week on 15, May 2026, mirroring the same trend as gold due to strong dollar index and weak demand.
- The rupee closed the week lower against the US dollar, pressured by firm US Treasury yields and a stronger dollar index following resilient US macroeconomic data and reduced expectations of near-term Fed rate cuts. Volatile crude oil prices added pressure by raising concerns around India’s trade deficit and inflation outlook, while foreign portfolio outflows from domestic assets further weighed on the local currency. While RBI interventions provided episodic support and curbed sharp movements, the rupee continued to face downside pressure from unfavourable global cues and external sector concerns.
Source: Respective commodity exchanges, ibjarates.com
Source: Financial websites
Global Economic
- US Industrial Production increased 1.4% in April 2026 compared to upwardly revised 0.8% in March 2026 while the Manufacturing Production rose 1.3% from 0.5%.
- Eurozone S&P Global Flash Manufacturing PMI decreased to 51.4 in May 2026 compared to 52.2 in April 2026 while the S&P Global Flash Services PMI fell to 46.4 in May 2026 from 47.6 and the S&P Global Flash Composite PMI edged down to 47.5 from 48.8.
- Eurozone annual inflation rate rose to 3.0% in April 2026, compared to 2.6% in March 2026 significantly above the European Central Bank’s 2.0% target while the core consumer inflation rate dropped to 2.2% from 2.3%.
- UK annual inflation rate slowed to 2.8% in April 2026 compared to 3.3% in March 2026 while the annual core inflation rate eased to 2.5% from 3.1%.
- China’s industrial production expanded 4.1% on year in April 2026, slowing from a 5.7% rise in March 2026.
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