With private and foreign banks scaling down their lending activity and equity and overseas sources of capital drying up, the total flow of resources to the commercial sector has dropped by nearly 20 per cent till the end of February.
'Except for extremely conservative investors, others can consider allocating 10 to 20 per cent of their portfolio to small caps.'
The Reserve Bank of India (RBI) on Wednesday met the long-standing demand of banks by allowing them to finance acquisitions by Indian companies, a move that also expands banks' capital market lending in the country.
2025 marked a shift in investor preference when it comes to MF schemes.
The US Fed's interest rate decision will be the major factor dictating trends in the domestic equity market this week, with global movements and foreign investor activity also influencing sentiment, according to analysts. Stock markets ended the last week on a subdued note, with benchmark indices Sensex and Nifty closing flat.
Shares of brokerage-related companies nosedived 18 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed raising securities transaction tax on commodity futures to 0.05 per cent from 0.02 per cent in the Union Budget 2026-27.
This single amendment, unfortunately, overshadows much of the Budget's promise, explains Harsh Roongta.
The question is no longer whether the war will expand. It has. The next few days will tell us whether the war stabilises around Hormuz or whether the Strait itself becomes the trigger for a far larger rupture. What to watch for over the next 48 hours is simple: Any move by the US toward direct naval control of the Strait; any credible Iranian attempt to disrupt or mine shipping lanes and, critically, whether energy infrastructure in the Gulf continues to be targeted.If those lines are crossed in tandem, the war will no longer be containable within the region.
The country's primary capital markets delivered a robust performance in FY26, emerging as a global leader in initial public offerings (IPOs) despite an uncertain environment, the Economic Survey said on Thursday.
The purge in Washington does not pause the war. Strikes continue, Hormuz remains closed, and Brent crude is still dancing around $109 a barrel. For India, the command chaos in the Pentagon is another layer of uncertainty piled on five weeks of conflict that was already straining every buffer Delhi has.
'The first time India has seen two consecutive blockbuster IPO years.'
External commercial borrowing and short-term credit from abroad, which met more than 20 per cent of India Inc's credit needs in the 2007-08 fiscal, have contributed only 8.2 per cent of the financing needs. However, bank credit has increased by nearly Rs 38,000 crore (Rs 380 billion) in the current fiscal, meeting 61 per cent of fund requirement for companies.
Global risks include a potential delay in the US-India trade agreement, the possibility of a sharp correction in US equity markets, and renewed geopolitical tensions.
'This Budget has a one-year agenda, which you can call the sprint, and the marathon is towards Viksit Bharat.'
Among the Sensex constituents, Asian Paints, Tech Mahindra, HCL Technologies, Tata Steel, Maruti Suzuki India, Sun Pharmaceuticals, Tata Consultancy Services, ICICI Bank, Bajaj Finance, UltraTech Cement, Mahindra & Mahindra and Tata Motors Passenger Vehicles were the laggards. However, Eternal, Titan, Adani Ports, Bharat Electronics Ltd, State Bank of India, Bajaj Finserv, NTPC and Bharti Airtel were among the gainers.
The United States, which entered this war in expectation of a short, sharp win along the Venezuela model, is now preparing for deeper involvement in a conflict it does not fully control, without the allies it typically relies on, against an adversary that is not behaving as expected, in a global environment that is already absorbing economic shock. Prem Panicker continues his must read daily blog on the Gulf War.
'Foreign capital will continue to come directly into India, but companies have realised that GIFT City is a more cost-efficient way of channelling funds.'
Despite recent underperformance, MNC funds have delivered over longer time frames.
'Even if India is attractive, FPIs currently lack the funds to invest, as money is being redirected to the US.'
Stock markets are in for an event-heavy week ahead with a raft of Q1 earnings from blue-chips, the US Fed interest rate decision and foreign investors trading activity driving investors' sentiment, analysts said. Macroeconomic data announcements, monthly auto sales numbers and global market trends would also guide movement in the domestic equities, they said.
The recent policies that have been announced by the Reserve Bank of India (RBI) will allow banks to fully use its capital, funding profile to keep business at an equilibrium level, which otherwise was getting skewed towards retail, said K V Kamath, chairman, Jio Financial Services.
The finance minister said that consolidation of state-owned banks could proceed at any time without waiting for the recommendations of the proposed high-level committee on banking.
Benchmark stock indices Sensex and Nifty dived sharply by nearly 2 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed a hike in the Securities Transaction Tax (STT) on derivatives. Reversing the early gains, the 30-share BSE Sensex plunged sharply by 2,370.36 points or 2.88 per cent to slide below the 80,000-mark at 79,899.42 in afternoon trade as the finance minister announced a hike in STT on futures contracts to 0.05 per cent from the current 0.02 per cent.
FDI inflows into India are expected to register robust growth in 2026, supported by strong macroeconomic fundamentals, big-ticket investment announcements, sustained efforts to improve the ease of doing business, and a new generation of investment-linked trade pacts.
Assessing where their funds are flowing gives traders a hidden edge in predicting the market direction and momentum.
Trade deals ease risks for Indian equities, but weak demand and stretched valuations raise questions over whether optimism -- especially in smallcaps -- can turn into a sustained bull run, points out Debashis Basu.
The rupee breached 90-levels against the greenback for the first time on Wednesday, falling 6 paise to 90.02 in early trade, as banks kept buying US dollars at higher levels and FII outflows continued.
Finance Minister Nirmala Sitharaman on Sunday announced an increase in the Securities Transaction Tax (STT) on Futures and Options trade with a view to discouraging small investors from speculative trading in derivatives, which led to a sharp decline in the stock market.
Stock markets will be mainly driven by quarterly earnings by corporates, foreign fund flows and global trends this week, analysts said.
The strong domestic flow offset selling by foreign portfolio investors who pulled out $23.3 billion (Rs 2.03 trillion) from domestic equity markets in CY25.
Global funds have pulled out Rs 1.54 trillion from domestic stocks in fiscal 2024 - 25 (FY25), the highest-ever outflow recorded so far, according to the data compiled by Business Standard. The last time the global funds exited Indian shores in droves was back in 2022, when they sold a net Rs 1.41 in the backdrop of Covid-19.
The Supreme Court's verdict directing Tiger Global to pay capital gains tax on its 2018 sale of Flipkart shares is unlikely to accelerate the selloff by foreign portfolio investors (FPIs). However, legal and tax experts say the ruling sharpens scrutiny around treaty benefits and could influence how offshore investors structure future India bets.
India was being evaluated for a potential weight of around 1 per cent in the index, an allocation that could have translated into $25 billion of inflows, spread over roughly 10 months.
From the Sensex pack, NTPC, Bajaj Finance, Kotak Mahindra Bank, Axis Bank, Nestle, Larsen & Toubro, Tata Motors, ICICI Bank, Power Grid and Zomato were among the gainers. However, Infosys, Tata Steel, Mahindra & Mahindra, Titan and Bajaj Finserv were among the laggards.
The partially convertible rupee closed at 60.30/31 per dollar compared with 60.28/29 on Friday.
'As the PLA higher command is almost dismantled and instability spreads, India needs to be prepared for any eventuality,' cautions China expert Srikanth Kondapalli.
The rupee recovered 55 paise from its all-time low level to close at 90.38 against the US dollar after a volatile trade on Wednesday, amid suspected aggressive central bank intervention.
President Donald Trump has withdrawn the United States from over 60 international organisations, including United Nations bodies and the India-France-led International Solar Alliance, calling the institutions 'redundant' and 'contrary' to America's interests.
Nobutaka Kitajima, chief investment officer -- equity, LIC Nomura Mutual Fund, tells Business Standard the reaction to the Fed's statements has been overdone and the current downturn has punished certain stocks much more than their inherent economic worth and business potential.
I am inclined to believe that the Venezuela adventure is not an indication of American strength, alas, but rather of American weakness, points out Rajeev Srinivasan.
