Market Map - Altifi Monthly Bulletin | August 2026

RBI Monetary Policy Key Measures

Other Key Developments

• The RBI's tighter capital market norms pertaining to bank exposures to real estate and capital markets, including limits on third-party collateral usage and explicit lending caps, came into effect from July 1. Implementation had been scheduled to come into effect from April 1 but was deferred to July

• The RBI issued new directives for bank Boards, aimed at rationalising the matters placed before them, streamlining their agenda requirements and enabling them to focus more on strategic oversight, governance, and risk management. The revised framework is set to come into effect from October 1

• The RBI introduced the new Integrated Ombudsman Scheme, 2026, replacing the erstwhile 2021 framework

• The RBI released the draft Foreign Exchange Management (Foreign Investment) Rules, 2026, for public consultation, seeking to replace the existing Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. With this, the central bank proposed a principle-based regulatory framework aimed at rationalising provisions, harmonising definitions, simplifying the regulatory structure and reducing the compliance burden for foreign investors

• The central bank permitted banks to offer differential interest rates on bulk deposits based on their liquidity characteristics under the liquidity coverage ratio (LCR) framework. The decision is aimed at bringing about greater flexibility in pricing

• The Securities and Exchange Board of India (SEBI) amended SEBI (Mutual Funds) Regulations, 2026, to permit mutual funds to use intraday borrowing facilities to manage short-term liquidity mismatches arising from differences in market settlement timings. The new framework is to come into effect on September 1

• SEBI simplified the framework for transmission of securities by introducing a fast-track mechanism for low-value claims and standardizing documentation requirements

• SEBI directed depositories to put in place an operational framework and required system upgrades by August 1 to facilitate the implementation of the newly introduced ISIN (International Securities Identification Number)-level freeze mechanism for promoter and promoter group holdings during share buybacks

• SEBI revised rules governing unpaid client securities by setting stricter timelines and mandating stockbrokers to keep investors informed at every stage. The regulator also laid down a clear procedure for cases where the shares cannot be sold immediately

• SEBI notified amendments to the Foreign Portfolio Investors Regulations, mandating that registration and related fees be paid in Indian rupees instead of United States (US) dollars
  

India remains resilient despite global uncertainties

Source: Ministry of Statistics and Programme Implementation, Crisil Centre for Economic Research (CCER) Data as of July 2026

Key economic indicators

Source: Ministry of Statistics and Programme Implementation, Crisil Centre for Economic Research (CCER) Data as of July 2026

Performance of high-frequency indicators

Debt Indicators
. Domestic yields rose in July 2026, due to concerns around inflation and global developments.

. Currency in circulation steady in July 2026.

Economy:
• Fiscal deficit stood at Rs 3078.33 billion in June 2026 vs Rs 1623.54 billion in May 2026.

• Manufacturing Purchasing Managers' Index (PMI) eased to 53.5 in July 2026 from 54.2 in June 2026.

• Goods and services tax (GST) collection rose to Rs 2.11 lakh crore in July 2026 from Rs 1.95 lakh crore in June 2026 .

Sector update:
• Commercial vehicle witnessed strong growth of 31% in June 2026 on-year.

• Bank deposit rose at 12.68% while credits rose to 17.71% on-month, in July 2026.

• Infrastructure sector activity growth accelerated 5.0% in June 2026 on-year.

Key economic indicators

 

Source: Ministry of Statistics and Programme Implementation, Crisil Centre for Economic Research (CCER) Data as of July 2026

• The Reserve Bank of India (RBI) said India’s current account deficit stood at US$ 25.2 billion (0.6% of GDP) in 2025-26 as compared to US$ 22.9 billion (0.6% of GDP) during 2024-25.

• India's merchandise trade deficit stood at $30.43 billion in June, with exports of $40.41 billion and imports of $70.84 billion.

• Latest sectoral deployment data released by RBI showed services loans remained on top at 21.43% on year in June.
  
  

Bond yields rose on month in July 2026

*3 Month ago: Date as of 30th April 2026

*6 Month ago: Date as of 30th Jan 2026

                 10Y G-sec

Source: Crisil Intelligence, Data as of July 2026

• The interbank call money rate declined to 5.35% on July 31, 2026 from 5.45% on June 30, 2026.

Bond Yields rose on-month in July 2026

• The benchmark 10-year government security (G-Sec) yield ended the month at 6.83% on July 31, compared with 6.76% at the end of June. The domestic bond market remained rangebound for most of the month, as concerns around inflation and global developments were broadly balanced by strong demand for government securities from both domestic and foreign investors.

• In the first half of July, benchmark yields moved in a narrow range, supported by steady investor demand for G-secs and healthy participation in primary auctions. Continued foreign investor interest in fully accessible route securities, coupled with expectations that the RBI would maintain the policy repo rate at 5.25%, provided stability to the market, despite intermittent global uncertainties. The inclusion of domestic bond in global diversified index also boosted the sentiments.

• Foreign portfolio investors (FPIs) remained net buyers in the debt segment during July, with net inflows of Rs 18,661 crore, driven by purchases worth Rs 29,212 crore under the General Limit and Rs 3,033 crore under the Fully Accessible Route (FAR), partially offset by outflows of Rs 13,584 crore from the Voluntary Retention Route (VRR).

• As the month progressed, yields experienced upward pressure amid an intermittent rise in global crude oil prices and heightened geopolitical uncertainty. These developments revived concerns about rising imported inflation and its potential impact on India's inflation trajectory.

RBI maintained the repo rate at 5.25% in the August 2026 policy meeting.

Source: Crisil Intelligence, RBI Data as of 31st July 2026

Note: Liquidity (-) is Surplus and (+) is Deficit 12

Movement of long-and-short-term yields and spreads

Source: Crisil Intelligence; CD – certificate of deposit; CP – commercial paper Data as of July 2026

Broader domestic equity indices rose on-month in July 2026

Source: NSE, BSE Data as of July 2026

• Indian equities ended July on a positive note, with the benchmark indices closing slightly higher compared with June, supported by domestic resilience and intermittent improvement in global cues through the month.

• The market was influenced by a combination of global developments, including the situation in West Asia, fluctuations in crude oil prices and evolving expectations pertaining to central bank policies across the globe, alongside domestic factors such as earnings expectations and investor inflows.

• The BSE Sensex rose 2.11% to 78,094.64 on July 31 from 76,478.67 on June 30, while the Nifty 50 gained 2.17% to reach 24,383.60 from 23,865.75, reflecting moderate gains amid intra-month volatility.

• Market sentiment was supported by easing crude oil prices in parts of the month, optimism surrounding a potential India-US trade agreement and expectations of an accommodative global interest rate environment. Investors were also encouraged by the start of earnings season for the first quarter of fiscal 2027, while resilient domestic fundamentals helped sustain market confidence.

• Overall, supportive domestic factors, optimism over earnings and improving global cues helped Indian equities deliver positive monthly returns, offsetting the impact of geopolitical uncertainty, commodity price volatility and policy-related uncertainties.
  
  

Indian equity heatmap

Source: NSE, BSE Data as of July 2026

• Sectoral performance was mixed, with the BSE Information Technology (IT), BSE Realty and BSE Auto emerging as the top gainers, rising 14.71%, 8.65%, and 7.98%, respectively.

• Gains in these sectors were driven by earnings optimism, an improving demand outlook and support from expectations of a softer interest rate environment.

• Despite the positive undertone, markets remained volatile amid periodic profit booking and external uncertainties.

• Additionally, developments regarding India-US trade negotiations, particularly regarding the tariff framework for Indian exports, contributed to the cautious mood and limited broader market gains.

• Among the laggards, the BSE Power and BSE PSU declined 5.26% and 0.83% respectively, due to profit booking and investor caution, amid prevailing macroeconomic uncertainties

PE, PB and Dividend Yield

Source: NSE, Data as of July 2026

• Valuations across most indices are currently below their 10-year averages, suggesting markets are still reasonably placed despite recent stability.

• Large caps (Nifty 50) are trading below their long-term averages on both P/E and P/B.

• Banking stocks remain the most attractive, with both P/E and P/B.

• IT stands out with the highest dividend yield among sectors, while Energy and Pharma are trading above their historical averages.
  

Nifty 50 Earnings Growth – Quarterly Trend

• Nifty 50 earnings surged during FY21–FY22, driven by post-pandemic recovery and favourable base effects.

• Earnings growth moderated after FY23, with quarterly growth becoming more stable despite some fluctuations.

• Recent soft patches appear cyclical, reflecting macroeconomic and margin pressures rather than structural earnings weakness.

• FY27 estimates indicate a gradual recovery in earnings growth, although sustained upside will depend on stronger demand and an improvement in corporate profitability.

Estimates – light blue portion for FY27

Source: Crisil Intelligence, Bloomberg, Data as on July 2026

India Market cap to GDP (%) and Corporate Earnings vs GDP Growth

India's market capitalization-to-GDP ratio has risen significantly over the years, increasing from around 79% in FY17 to 127% in FY26, well above the long-term average of 96%. Although the ratio is expected to moderate slightly to 118% in FY27E.

Corporate earnings have consistently grown faster than nominal GDP over FY23–FY27E, reflecting resilient corporate profitability despite fluctuations in economic growth. In FY27E, nominal GDP growth is projected to remain relatively stable at 11%.

Light blue area in Market to GDP graph is Estimates (E) – FY27
Source: Crisil Intelligence, Crisil Centre for Economic Research (CCER), NSE, Bloomberg, Data as on July 2026,

*Nifty EPS FY estimates are calculated using the sum of the four quarterly Bloomberg consensus EPS estimates for the respective financial year.

Market valuations

Source: NSE, Crisil Intelligence Data as of July 2026

Market sentiment (1/2)

Source: FIIs (NSDL), DIIs (NSE) Data as of July 2026

• Foreign institutional investors (FIIs) were net buyers of equities worth Rs 20,200 crore as of 31 July 2026, compared with net selling of Rs 49,340 crore as of 30 June 2026.

• In contrast, domestic institutional investors (DIIs) were net buyers of equities worth Rs 35,099 crore as of 31 July 2026, compared with net purchases of Rs 85,800 crore as of 30 June 2026, supporting the market.
• Volatility of the Nifty 50 index, as measured by India VIX declined during the month and ended at 11.76 on 31 July 2026 compared to 13.60 on 30 June 2026

Market sentiment (2/2)

• Assets under management (AUM) of the domestic mutual fund (MF) industry rose 4.30% on-month in July to Rs 85.76 lakh crore, compared with Rs 82.22 lakh crore the previous month, led predominantly by Debt-oriented mutual funds.

• Rise in AUM the industry recorded a net inflow of Rs 235,902 crore in July compared with an outflow of Rs 52,949 crore in June.

• Assets of open-ended equity funds rose 2.74% on-month to Rs 38.36 lakh crore in July. The category’s net inflow eased to Rs 24,697 crore in July compared with the inflow of Rs 28,973 crore in June.

• Assets of hybrid funds rose by 2.08% on-month to Rs 11.68 lakh crore in July owing to gains in the assets of Dynamic Asset Allocation/Balanced Advantage Fund. The category’s net inflow eased to Rs 11,491 crore in July compared with inflow of Rs 12,893 crore in June.

• Assets of open-ended solution-oriented funds rose 2.00% on-month to Rs 60,873 crore in July compared with Rs 59,680 crore in June. The category’s net inflow rose to Rs 379 crore in July compared with Rs 321 crore in June.

• The cumulative asset base of exchange-traded funds (ETFs) and index funds rose to Rs 15.61 lakh crore in July compared with Rs 15.30 lakh crore in June.

• Collections through systematic investment plans growth rose to Rs 31,781 crore in June compared to the previous month. The number of SIP accounts rose to 9.78 crore from 9.64 crore in the same period.

Source: FIIs (NSDL, SEBI), SIP (AMFI) Data as of July 2026

Global central banks maintained a cautious policy stance

• The US economy expanded 1.5% in the second quarter of calendar year 2026 compared with 2.1% in the first quarter.

• The Federal Reserve (Fed) maintained the federal funds rate target range at 3.50-3.75%, reflecting confidence that economic activity, productivity, business investment and labor market conditions remained strong.

• The Eurozone economy grew 1.0% on-year in the second quarter of calendar year 2026 from an upwardly revised 0.5% in the previous quarter.

• The European Central Bank (ECB) kept its key interest rates unchanged at its July meeting, maintaining the deposit facility rate at 2.25%, main refinancing operations rate at 2.40% and marginal lending facility rate at 2.65%, as policymakers adopted a cautious, data-dependent approach following a rate hike of 25 bps in June.

• The Bank of England (BoE) kept its interest rates unchanged at 3.75% at its July meeting in a 6-3 vote, while three policymakers voted for a hike of 25 bps to 4.0%.

• The decision reflected a balance between easing inflationary pressures and risks from higher energy prices amid geopolitical uncertainties.

• The Bank of Japan (BoJ) kept its short-term policy interest rate unchanged at 1.0% at its July meeting, after a hike of 25 bps in June.

• The decision was approved by an 8-1 vote, with one Board member advocating a rate increase to 1.25%.

Note: Data as of July 2026; ECB policy rate represented by Main Refinancing Operations Rate Source: Financial websites

Developed countries and emerging countries Purchasing Managers’ Index (PMI)

Note: Data as of July 2026, Source: Refinitiv

• US ISM Manufacturing PMI rose to 55.6 in July, compared to 53.3 in June 2026.

• UK S&P Global Manufacturing PMI edged down to 51.9 in July, compared to 52.5 in June 2026.

• Japan S&P Global Manufacturing PMI eased marginally to 54.5 in July, compared to 54.8 in June 2026.

• India HSBC Manufacturing PMI eased to 53.5 in July compared to 54.2 in June 2026 .

• China RatingDog General Manufacturing PMI declined to 50.9 in July, compared 45 49.80 50.90 to 51.7 in June 2026.
  
  

Global inflation mostly higher on-year in June 2026

Note: Data source as of July 2026, Source: Financial websites

• The US annual inflation rate eased to 3.5% in June 2026 compared to 4.2% in May 2026.
• The Eurozone annual inflation eased to 2.8% in June 2026 from 3.2% in May 2026.
• The UK’s consumer price eased to 2.6% in June 2026 from 2.8% in May 2026.
• China annual inflation eased to 1.0% in June 2026, from 1.2% in May 2026.

IMF and Current GDP forecast

Note: Data as of July 2026, Source: IMF, Financial websites, MOSPI

*Data for Q2 2026

Global yields ended higher on-month in July 2026

Source: Crisil Intelligence, Financial websites Data as of July 2026

• Resilient US economic data, elevated crude oil prices and expectations that the Federal Reserve would keep interest rates higher for longer helped the yield on the US 10-year Treasury close at 4.75% on July 31, up from 4.42% on June 30.

• Early in the month, the benchmark yield rose on the back of a stronger-than-expected job growth print as per the June 2026 nonfarm payroll report and a return to expansionary zone of the ISM Services PMI in June. Rising crude oil prices also fuelled inflation concerns, prompting investors to scale back expectations of a Fed rate cut in the near term.

• Mid-month, yields remained elevated after the June CPI print highlighted persistent inflationary pressures and June retail sales and industrial production pointed to continued economic resilience. Elevated crude oil prices further reinforced concerns that inflation could trend above the Fed's target over the near term.

• Towards the end of the month, the benchmark yield rose further as the July S&P Global Flash PMI signalled continued expansion in business activity and expectations of further Treasury issuances increased. Also, maintaining upward pressure on the long-term yield were a widening fiscal deficit and expectations of the Fed's cautious policy stance.
  
  

Global equities ended mixed on-month in July 2026

Source: Crisil Intelligence, Financial websites Data as of July 2026

• Global equity markets experienced mixed performance in July. 

• US benchmark indices ended mixed in July, with the Dow Jones Industrial Average rising 0.32%, while the Nasdaq 100 declined 6.61%. The Dow Jones gains were supported by resilient economic growth expectations and solid corporate earnings. The weakness in the Nasdaq Composite was because of technology and semiconductor stocks, pulled down by concerns over elevated AI-related capital expenditure.

• The FTSE 100 gained 3.53% in July, supported by strength in banking, communications, consumer staples and mining stocks. Higher oil prices also boosted energy and commodity-linked shares.

• Japan's Nikkei 225 declined 8.14% in July as investors booked profits in AI and semiconductor stocks, following a strong rally. Concerns over slowdown in the global chip industry and uncertainty surrounding AI investmentSource: Crisil Intelligence, Financial websites Data as of July 2026

• Hong Kong's Hang Seng Index rose 13.13% in July, led by strong gains in technology, internet, financial and healthcare stocks.

Trend in currencies on-month in July 2026

Source: Crisil Intelligence, Refinitiv, Data as of July 2026

*Source: RBI Reference Rate

• The Indian rupee weakened vs the United States (US) dollar during a volatile July, with the Reserve Bank of India (RBI)’s reference rate depreciating 77 paise to Rs 95.37 from Rs 94.60 in June.

• The rupee ended the month lower against the dollar due to sustained demand for the greenback from importers and corporates, alongside elevated crude oil prices, which kept concerns around the trade deficit and inflation outlook in focus. The situation in West Asia and a broadly firm dollar also weighed on sentiment for the Indian unit.

• However, supportive domestic factors partially offset the downside. Likely RBI intervention helped contain volatility, while steady foreign fund inflows supported the Indian currency.

• According to data from the RBI, banks mobilised $40.82 billion under the RBI’s concessional swap facility as of July 31, 2026, including $36.73 billion through foreign currency non-resident (bank) deposits, $2.58 billion via overseas foreign currency borrowings and $1.52 billion through external commercial borrowings. Additionally, phases of moderation in crude oil prices resulted in a mild recovery in the rupee, but gains remained limited amid the persistent dollar demand.

Commodity

Source: Crisil Intelligence, Bloomberg, Refinitiv, Data as of July 2026

• Crude oil price rose in July supported by renewed Middle East tensions and concerns over disruptions to global oil supplies. Falling US crude inventories and heightened risks around the Strait of Hormuz further boosted prices.

• Gold prices declined in July due to profit booking.

• Base metals rose in July, driven by China stimulus expectations and tighter inventories.

Key events to watch out for

Market at a glance

Note: *Fiscal Deficit is presented as an absolute change. Rupee values are represented using the RBI Reference Rate.

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