Weekly Market Impact — for the week ending on 29th May 2026

Weekly Capsule (May 25 – May 29) and Impact Analysis

India weight in MSCI EM index falls to 11.2%, causing sharp market collapse

• India weight in the MSCI EM index had fallen from over 20% in 2021 to 12.4% in Feb-26 , and will now fall further to 11.2%
• This reduction in weight is largely on account of a sharp rise in the weight of China, Taiwan, and Korea; amidst the AI rally

Fall in MSCI EM weight could deepen selling by passive funds and index ETFs

• Most of the passive funds and ETFs benchmark EM exposure to the MSCI EM index, and it means lower allocations for India
• This was the factor that triggered a market collapse of 850 points in the Sensex on Friday 29-May after the MSCI news

Brent Crude Oil prices fell sharply to $90.90/bbl on Middle East peace hopes

• There are strong indications that the US and Iran may sign a deal and even open up the Straits of Hormuz completely
• While the supply chains may take some time to stabilize, the positive triggers have already led to a fall in crude oil prices

USDINR hardened sharply to ₹94.96/$ on RBI intervention and lower oil prices

• Rupee had dipped to a low of ₹96.97/$ on 20-May, but has since been helped by RBI selling dollars and falling crude
• However, the situation in the Middle East still remains fluid and the FPIs continue to be net sellers on a monthly basis

RBI reports revenues of ₹4.27 trillion and surplus of ₹2.87 trillion in FY26

• Balance sheet size expanded from ₹76.25 trillion in FY25 to ₹91.97 trillion in FY26, led by revaluation of gold and forex
• Forex gains from rupee/dollar management accounted for about 40% of the total revenues earned by RBI in FY26

India met its fiscal deficit target for FY26 at 4.4% of GDP as per CGA data

• Total expenditure was marginally lower at ₹49 trillion, while the government met 98% of its total capex commitments
• Amidst rising fertilizer and fuel subsidy, the fiscal deficit target of 4.3% of GDP in FY27; could pose a much bigger challenge

UK government may stall Bharti group’s plans to raise stake in BT to near 30%

• British Telecom, being a core infrastructure company, Bharti will need UK government approval to go above 25% stake
• UK is likely to invoke the National Security and Investment Act to stall stake hike, though Bharti does not plan to cross 30%.

Reliance Industries announced that its 49th AGM will be held on 19-June 2026

• This year’s AGM, earlier than usual, will be in focus for RIL’s likely pivot from oil to gas and chemicals in its O2C vertical
• However, the big announcement will be the finer details of the proposed $4 billion IPO by its telecom unit, Jio Platforms

Online gaming to take a hit as Supreme Court upholds the retrospective GST

• This retrospective GST is likely to add to the burden of gaming companies by more than ₹1,20,000 crore as past dues payable
• SC also rejected the plea to tax online gaming on platform fees, and will instead impose GST on full face value of bets

Taiwan crosses India in market cap even as South Korea inches closer

• While TSMC of Taiwan has become a $2 trillion market cap company, Samsung and SK Hynix of Korea are $1 trillion now
• AI companies in Asia have seen a tremendous rally in the last one year and that is where Indian markets have lagged

Bharti Airtel underlines that its Priority Postpaid Scheme was still Net Neutral

• Airtel has already presented to TRAI that assuring smooth access to select customers does not hamper net neutrality
• Interestingly, even Jio has supported Airtel on this contention, that 5G spectrum slicing was common practice even globally

Government urges the Tata group to resolve internal board issues quickly

• A lot is expected to transpire between the 26-May meeting and the upcoming 08-June meeting of the Tata boards
• Government is keen on the issue being resolved smoothly, considering the size and criticality of Tata group for India

Portfolio Managers saw -6.5% fall in FPI clients in the month of April 2026

• This also triggered a -13.7% fall in AUM of PMS companies, as FPIs continued to exit Indian equities in favour of rest of Asia
• Ironically, during this period, the number of PMS originators have increased 4.4%, while PMS distributors doubled in FY26

Asian Paints reported 69% higher net profits for Q4FY26 at ₹1,172 crore

• Despite the supply chain constraints towards the end of the year, Asian Paints gained growth in decorative paint volumes
• Top line sales for Q4FY26 were also up 11% yoy at ₹9,328 crore, even as it declared final dividend of ₹23 per share

Reliance targets to start Giga Battery production in July, at 40 GWh capacity

• It will scale up output in H2-2026; focused on LFP (Lithium Iron Phosphate) chemistry for utility scale BESS and mobility
• The start was delayed by Chinese export barriers, shipment delays, technology integration, and equipment lead time

India’s energy investments are likely to touch $170 billion in calendar 2026

• This massive investment is likely to be driven by big outlays in solar PV capacity as per a report put out by the IEA
• For the year 2026, the solar and wind energy segment combined will account for over 50% of capacity accretion

India signs ambitious $3.3 billion hi-tech semiconductor deal with Intel

• The 3-way agreement was signed between the state of Odisha, Intel and 3D Glass Solutions of the US
• The semiconductor substrate manufacturing project will be one of the key inputs for advanced chip packaging technology

BOFA cuts Indian corporate profit FY27 growth estimate from 14% to 8.5%

• Indian corporate profits are likely to be hit by higher input costs, supply chain constraints, and weak domestic demand
• The bigger concern is that sharply lower earnings growth could once again raise serious questions over valuation

In the latest RBI Bulletin, it underlined the robustness of Indian BFSI players

• RBI Bulletin underlined that banks and NBFCs were strong in FY26 in terms of asset quality and capital adequacy buffers
• Recent stress tests have evidenced that banks and NBFCs are in a position to stand economic shocks of high magnitude

India data centre capacity to cross 3GW by 2028 on AI, hyper-scaler demand

• In India; cities like Mumbai, Chennai, Hyderabad, and Delhi NCR are likely to be the key hubs driving data centre growth
• According to CBRE, there is a big gap between data produced by India and total data hosted by India within its geography

Gulf War results in Indigo reporting net loss of ₹2,536 crore in Q4FY26

• However, the revenues for the quarter were marginally higher yoy at ₹22,438 crore, as it retained its dominant market share
• For the fourth quarter of FY26, Indigo saw fall in passenger traffic by -1.1% as well as a -1.7% fall in load factor to 85.8%