Economy and regulatory updates
- Financial conditions, crude oil prices and capital flows continue to pose challenges to India’s external sector outlook amid the conflict in West Asia, according to the Reserve Bank of India (RBI) Bulletin for May.
- The government decided to exercise the oversubscription option in the ongoing offer for sale of Central Bank of India, raising the issue size from 4% to 8% of the bank’s equity capital.
- The government notified changes to the Insolvency and Bankruptcy Code, easing rules for insolvency resolution of micro, small and medium enterprises, while tightening conditions to prevent conflicts of interest in pre-packaged insolvency resolution.
- The Union Cabinet approved the Sarthak-PDS scheme, allocating Rs 25,530 crore to support state governments in foodgrain distribution under the Pradhan Mantri Garib Kalyan Anna Yojana.
- Tamil Nadu Chief Minister C Joseph Vijay announced a waiver of farm loans of up to Rs 50,000 for marginal farmers and a Rs 5,000 relief package for large farmers facing agricultural distress.
- The Centre published draft rules under the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, for public consultations, following the notification of the law’s implementation in all states and union territories, effective July 1.
- The RBI introduced a three-year cooling-off period for cooperative bank directors after 10 years of service, tightening governance standards in the sector.
- The Securities and Exchange Board of India (SEBI) proposed standardising options strike price norms. The proposed derivatives market reform is aimed at exchange-traded options contracts and broader market participants.
- SEBI has proposed a dynamic options strike framework to better match strike availability with market movements, reduce volatility-related disruptions and improve trading continuity.
- The Insurance Regulatory and Development Authority of India (IRDAI) has amended the IRDAI (Corporate Governance for Insurers) Regulations, 2024, directing insurers to tie the remuneration packages of MDs, CEOs and senior management to customer-centric outcomes, such as claim responsiveness,
Source: MOSPI, RBI
Indian debt market update
- The interbank call money rate ended higher at 5.55% in the week ended May 29 compared with 5.37% in the week ended May 22.
- The yield on the 10-year benchmark 6.48% GS 2035 paper closed lower at 7.00% on May 29 compared with 7.09% on May 22, as a fall in crude oil prices boosted market sentiment.
- Crude oil prices declined owing to optimism over talks to end the conflict in West Asia, easing concerns over imported inflation and the domestic macro-outlook.
- Debt market investors will closely monitor the upcoming decision by the RBI’s Monetary Policy Committee (MPC) for signals on the interest rate trajectory and liquidity stance.
- Banking system liquidity conditions, geopolitical developments, crude oil prices and global yield movements will also affect the domestic yield trajectory.
Source: CRISIL Fixed Income Database, RBI *Weighted Average Yield ^ Data as of 22nd May 2026 vs 15th May 2026 vs 17th Apr 2026 respectively
Source: CRISIL Fixed Income Database; *Weighted Average Yield
Indian equity market updates
- Indian equities ended marginally lower during the week, pressured by elevated profit-booking and persistent foreign fund outflows. However, intermittent fall in crude oil prices and a strengthening rupee, provided support to the market. The BSE Sensex and Nifty fell 0.85% and 0.72%, respectively.
- Most sectors ended the week higher. Fast-moving consumer goods (FMCG), oil and gas, and healthcare stocks declined the most, dragged down by profit booking. BSE FMCG, BSE Oil & Gas and BSE Healthcare fell 1.54%, 1.41% and 0.98%, respectively.
- Power, capital goods (CG) and auto stocks gained, supported by optimism over a deal to end the conflict in West Asia. BSE Power, BSE CG and BSE Auto gained 3.73%, 3.19% and 1.21%, respectively.
- Weekly flows: Domestic Institutional Investors (DIIs) recorded net inflows of Rs 31,303.12 crore, while Foreign Institutional Investors (FIIs) saw net outflows of Rs 27,705.92 crore.
- MTD trend: DIIs reported net inflows of Rs 82,165.05 crore, whereas FIIs registered net outflows of Rs 55,494.10 crore.
- YTD positioning: DIIs remained net buyers at Rs 3,76,784.61 crore, while FIIs stand as net sellers at Rs 2,89,259.49 crore.
Source: BSE, NSE
Source: SEBI, NSE
Global Equity market summary
- US stocks rose during the week, driven by AI optimism and hopes for easing of the conflict in West Asia, boosting risk appetite. Healthcare and consumer sectors supported gains.
- Investors also assessed uncertainty around geopolitical developments and inflation concerns due to a higher US PCE price index.
- Britain’s FTSE index declined during the week, owing to uncertainties over West Asia and domestic political turmoil.
- Asian equities closed mixed during the week. Japan’s Nikkei index ended higher, driven by hopes regarding talks to end the conflict in West Asia, positive global cues and optimism for AI-related stocks.
- Hong Kong's Hang Seng Index ended lower during the week, primarily due to profit-booking in shares related to AI and property. Additionally, technology and internet stocks also contributed to the decline.
- China’s Shanghai Composite Index closed lower, weighed down by profit-booking following recent gains and cautious investor sentiment surrounding geopolitical developments. Weakness in technology and commodity stocks also weighed on sentiment.
- However, few gains were witnessed earlier in the week owing to upbeat domestic data, which showed industrial profits grew at their strongest pace in over two years.
Source: Websites of respective stock exchanges;
Global Yield
- US 10-year Treasury yields declined during the week as concerns over oil-driven inflation eased amid expectations of potential easing of geopolitical uncertainties.
- During the week, Treasury yields moved lower, following optimism around possible diplomatic progress in West Asia, which reduced fears of supply disruptions and a sustained rise in crude oil prices. Investors also assessed the second estimate of US gross domestic product (GDP) for the first quarter of 2026, which showed annualised economic growth was revised down to 1.6% from the initial estimate of 2.0%. The softer-than-expected revision reinforced expectations of moderating economic momentum and influenced market views on the Federal Reserve’s policy outlook.
- Debt market investors will closely monitor upcoming US nonfarm payrolls data and inflation readings, particularly the Consumer Price Index, for clues on the Federal Reserve’s policy trajectory.
- The benchmark US 10-year Treasury yield declined to 4.45% on May 28, 2026, from 4.56% on May 22, 2026.
Source: Financial Websites
Commodities and Currency
- Crude oil prices declined during the week on the NYMEX to $87.36 per barrel on the NYMEX on week on 29, May 2026 from $96.60 per barrel on the NYMEX on week on 22, May 2026, driven by sufficient US supplies and hopes of a potential end to the conflict in West Asia, which boosted expectations that the Strait of Hormuz would reopen.
- Gold prices fell this week to Rs 1,56,463 per 10 grams in week on 29, May 2026 from Rs 1,58,117 per 10 grams in week on 22, May 2026 owing to a strong dollar index.
- Silver prices edged down to Rs 2,63,350 per kg on week on 29, May 2026 from Rs 2,66,000 per kg on week on 22, May 2026, mirroring the trend in gold amid a firm dollar.
- The rupee ended the week higher at Rs 95.38 against the United States (US) dollar, supported by optimism over a deal to end the conflict in West Asia, which eased crude oil prices, along with a weaker US dollar and supportive central bank measures. However, gains were capped by intermittent strength in the dollar, persistent foreign fund outflows and cautiousness ahead of the MPC meeting.
Source: Respective commodity exchanges, ibjarates.com
Source: Financial websites
Global Economic
- The US economy experienced a notable rebound in the first quarter of 2026, with growth expanding at an annualized rate of 1.6%, compared to the 0.5% growth recorded in the previous quarter.
- US PCE price index rose 3.8% year-on-year in April 2026 compared to 3.5% in March 2026 while it rose sharply to 4.50% in Q1 2026 compared to 2.90% in Q4 2025, indicating a significant acceleration in consumer inflation.
- Eurozone consumer inflation expectations eased to 40.5 in May 2026,compared to 48.8 in April 2026.
- China industrial profits jumped 18.2% in April 2026, compared to a 15.5% rise in March 2026.
- Japan’s unemployment rate declined to 2.5% in April 2026, compared to 2.7% in March 2026.
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