Weekly Market Impact — for the week ending 07th August 2026

Weekly Capsule (Aug 03 – Aug 07) and Impact Analysis

RBI monetary policy holds repo rates steady at 5.25% in August 2026

• This retains the SDF rate at 5.00%, while the Bank Rate and the Marginal Standing Facility (MSF) rate stay at 5.50%
• The six members of the RBI-MPC were unanimous about holding rates and retaining stance of the policy at Neutral

RBI ups India GDP growth forecast and lowers inflation forecast for FY27

• RBI MPC has upped its GDP growth forecast by 10 bps to 6.7% for FY27 on strong domestic demand and post-war recovery
• At the same time, inflation estimate for FY27 was lowered by 10 bps to 5.0% as El Nino impact is likely to be more benign

FCNR(B) collections surged to $36.7 bn in 2 months; overall flows to $40.8 bn

• FCNR(B) flows have got a boost from higher rates of return, full forex risk coverage, and leverage up to 19 times
• While the Special RBI window closes on 30-September, RBI has ruled out early closure or extension of the deadline

US July unemployment falls further, but non-farm payroll accretion still too low

• For July 2026, the US unemployment rate came in at 4.1%, and has now fallen from a high of 4.4%, reducing Fed worries
• Non-farm payroll additions were tepid at 23,000, lower than the previous month’s 95,000 and well below GDP sustenance

RBI releases the updated list of Upper Layer NBFCs; Tata Sons still a part of it

• However, the RBI remains non-committal on the application made by Tata Sons to exempt them from listing requirements
• NBFC-UL is an AUM based classification and while Tata Sons is open to tighter regulation, they are averse to getting listed

Iran and Oman negotiate a 60-day time line to restore traffic in Hormuz Straits

• This is a bilateral agreement between Iran and Oman; and Iran has confirmed that the US was not party to the deal
• While entry to the strait will be from the Iran side, exit will be from the Oman side; but levies on ships remain an open issue

Global brokerages expect RBI to hike rate by 50-75 basis points in FY27

• While Morgan Stanley has been veering towards a 75-bps rate hike, others are more inclined towards a 50-bps rate hike
• Despite inflation staying under 6%, the general expectation is that the core inflation (net of gold/silver) may surge to 4.1%

Michael Burry (Big Short Fame) warns of another 1987-like crash in the US

• Burry feels that the correction could be driven by the twin factors of stretched valuations and weak dollar sentiments
• In 1987, a stretched market had corrected 22% in a day and 30% overall; before recovering fully over the next 2 years

Government of India collects ₹31,522 crore from the LIC offer for sale (OFS)

• While retail portion got only 69% expression of interest, the institutional portion on the first day was subscribed over 4X
• With greenshoe option being exercised, disinvestment flows get a boost and public shareholding in LIC goes up to 10%

SEBI to permit issue of depository receipts (DR) against REITs / INVITs

• This is likely to enable these REITs / INVITs to list in global exchanges and cater to realty investment demand globally
• This move is likely to enable REITs and INVITs to raise more of global capital, and also forces them to be more transparent

Government of India passes bill to modernize the Bank Records Law

• The legislation will be in tune with the substantial shift to digital banking, wherein digital records will be recognized
• It is also likely to result in substantial cost savings for banks, as maintaining physical records will no longer be mandatory

TCS and Infosys tap the AI opportunity in India from 2 different directions

• TCS will focus more on the AI infrastructure; like creating the HyperVault and readying the power grid for AI needs
• Infosys will focus more on the soft side; with accent on pure-play AI software integration and legacy system modernization

Brent Crude closed lower for the week at $83.42/bbl on Iran-Oman deal hopes

• For the week, Brent Crude touched a high of $86.33/bbl and a low of $78.11/bbl, as US reaction to the deal is still uncertain
• The Iran-Oman deal has promised to restore traffic through the Straits of Hormuz in 60 days, but levies could be an issue

The USDINR hardened during the week to close at relatively benign ₹95.16/$

• Rupee saw some strength with crude staying subdued and the Iran/Oman deal opening the door for return to normalcy
• The big factor supporting the rupee was the surge in FCNR(B) flows which has crossed $36 billion as of the close of July 2026

Spot gold gains further to $4,357/oz and spot silver bounces to $63.67/oz

• Both gold and silver got a leg up from signs of normalcy in the Middle East and further back-ending of rate hikes by the Fed
• Apart from the normalcy trade, there is also a value trade in both precious metals, that have corrected sharply from peaks

FPIs infused $2.10 billion into Indian equities in the month of July 2026

• Sector inflows were prominent in consumer services, healthcare, consumer durables, metals, and IT services
• The month also saw fairly pronounced FPI outflows from sectors like Capital Goods, Telecom, Auto, and Power

Government amends UPI rules to allow levy of merchant discount rates (MDR)

• UPI has been kept free of MDR till date, but now MDR may be imposed on high value UPI transfers and big-ticket purchases
• Volume growth in UPI has been one of the big success stories, and a small MDR charge should not reduce its attractiveness

Indigo is in talks with Embraer of Brazil for substantial regional jets order

• The Embraer E2 aircraft is slated to replace the fleet of ATR aircraft; which has been giving persistent problems to Indigo
• For Embraer, the best performing aircraft stock, this gives them room to set up a dedicated assembly unit in India

India MTF book rises to ₹1.40 trillion and to ₹1.95 trillion if LAS is included

• The MTF book is up nearly 11-fold in the last 6 years and could be a signal of growing froth in the small and mid-cap space
• However, equity leverage as a share of free-float market is low at just 0.87%; much lower than other major global markets

India cuts energy import-dependence from 47% to 42% in last 10 years

• The fall in energy dependence largely comes from coal, where the imports have fallen to 18%, amid higher domestic output
• However, the import dependence remains at around 90% in case of Crude oil and 63% in case of LNG; largely from Gulf

SBI reports 10.2% higher net profits in Q1FY27 at ₹21,121 crore on NII boost

• For the quarter, SBI reported 14.9% growth in net interest income (NII) to ₹46,992 crore; and gross NPAs lower at 1.47%
• However, the net interest margins (NIMs) were relatively subdued at 2.86% overall; sharply lower than private banks