Weekly Market Impact — for the week ending 12th June 2026

Weekly Capsule (Jun 08 – Jun 12) and Impact Analysis

India CPI inflation for May 2026 comes in 48 bps higher than April at 3.93%

• The big reason for the spike in CPI inflation was the pass-through impact of the increase in petrol and diesel prices
• Transport inflation increased by 176 basis points to 1.80%; and this impact was more acute in rural India than urban India

Core inflation up at 3.84%, Food inflation also higher at 4.5% in May-26

• The core inflation was driven by supply chain constraints as well as a modest spike in gold and silver inflation in May
• Imported inflation increased from 6.34% to 7.23%; hinting at pressure from exchange rate and global supply chains

The European Central Bank (ECB) takes the lead; raising rates by 25 basis points

• The ECB raised the benchmark rate from 2.00% to 2.25% to rein in inflation, which had spiked amidst the US-Iran war
• Among the major central banks globally, ECB is first off, the block in hiking rates while the Fed is still quite unsure

India expects $40-50 billion of inflows from hedging support mechanism

• The RBI policy last week had agreed that RBI would bear the FCNR (B) deposits hedging costs, to give a boost to banks
• The impact was visible with HDFC Bank raising FCNR(B) rates by 235 bps to 6.0%, to make even leveraged deposits viable

Mutual fund net outflows in May 2026 was ₹64,021 crore; led by debt funds

• Debt funds saw selling across the long and short end as investors stayed cautious ahead of a likely RBI rate increase
• Net inflows into equity funds and hybrid funds faltered in May 2026, while passive inflows were lowest in recent memory

SIP flows into Mutual Fund tapered in May 2026 to ₹30,954 crore

• Monthly SIP flows are sharply down from a high of ₹32,087 crore in the month of March 2026 due to market volatility
• Outstanding SIP folios touched 10.47 crore and SIP Stoppage improved to 95.45%, after crossing 101% in March and April

US Consumer Inflation for May 2026 touched a three-year high of 4.2%

• The big contributor was fuel inflation at 23.5%, essentially driven by a 40.5% spike in gasoline prices for the month
• The current consumer inflation is a full 220 basis points above the Fed target of 2.0%, and could trigger a hawkish response

The $75 billion IPO of SpaceX got overall subscription of over 4 times

• Elon Musk’s space and AI venture sold 556 million shares at a price of $135 each, making it thrice the IPO size of Aramco
• With Elon Musk holding 80% of SpaceX, it is expecting that, on listing, it would make Musk the first trillionaire in the world

India reports a current account surplus of $7.1 billion (0.7% of GDP) for Q4FY26

• This resulted in reducing the overall current account deficit (CAD) for FY26 to just $25.2 billion or 0.6% of full year GDP
• While higher crude and gold prices put pressure on the goods trade deficit, it was made up by service exports and NRI flows

Indian online buyers lose ₹28,000 crore a year to dark patterns, hidden charges

• Typical online traps include forced add-ons, drop pricing, surge pricing, subscription traps, urgency rules etc
• The data released by Datum Intelligence also highlighted that online buyers were willing to pay a premium for transparency

India finally starts to see improvement in bank deposit growth in May 2026

• For the month, the deposit growth of banks came in higher at 12.2%, compared to the recent average growth rate of 10.0%
• However, amidst the market uncertainty, the bulk of the deposit growth is coming from time deposits; reducing CASA

RBI to release new list of Upper Layer NBFCs; under scale-based regulation

• The last list released by the RBI on January 16, 2025 had 15 NBFCs and included the name of Tata Sons also in the list
• Post the representations made by Tata Sons, it remains to be seen if Tata Sons is still required to do an IPO as per RBI rules

FPIs were net sellers of $2.09 billion in equities in the week to June 12, 2026

• This comes on top of $4.5 billion sold in the first week, so FPIs have already sold $6.6 billion in equities in June 2026, so far
• For calendar 2026 YTD, the FPIs were net sellers in equities to the tune of $30.71 billion, as market uncertainty continues

Brent Crude fell further during the week to a low of $85.82 per barrel

• The improved supply flows from the US and Canada; as well as through the Straits of Hormuz have eased crude oil prices
• Another important factor in oil prices easing has been the sharp fall in Chinese oil demand, amid a big shift to EVs

SEBI explores allowing longer term F&O contracts to deepen derivatives market

• Today, the equity and index derivative contracts have a tenure between 1 month and 3 months; which is rather short
• Longer-term derivatives contracts will allow traders and business houses to hedge business risks over a longer period

Air India to cut seat capacity by 1.48 million in June 2026 to save on costs

• This has been necessitated by rising fuel costs, airspace restrictions, as well as weak flying demand among consumers
• That is roughly 22.5% of its total monthly seating capacity of 5.11 million and will result in substantial fuel-cost savings

Shell companies to come under tighter regulatory scanner under new rules

• A company will be considered inactive and be deregistered if it has no meaningful commercial activities for 3 years
• Currently, not filing returns is a potent reason or striking off companies, but that did not solve the Shell company challenge

Life insurance NBP in May 2026 records the slowest growth in eight months

• New business premiums (NBP) for May grew by just 5% in May to ₹32,031 crore with private insurers outshining LIC
• This is the slowest rate of growth in life insurance NBP, since the zero GST benefits were extended to life insurance premia

US-Iran war wipes out 1 billion barrels oil supply; to touch 2 billion by year end

• This was due to a combination of the blockade of Straits of Hormuz and shutting of oil production in the GCC region
• Even as oil fields are up against longer restart times, the oil prices are still stable due to a sharp fall in Chinese oil demand

Fintech player, Razorpay, will file its confidential DRHP for ₹5,700 crore IPO

• The IPO will be equally split into a fresh issue and an offer for sale (OFS); at indicative valuation of around $5-6 billion
• Razorpay is backed by some marquee investors like Peak XV, GIC Singapore, Tiger Global, Salesforce Ventures, Lightspeed

Tata Sons Board meet concludes with the FY26 accounts being approved

• However, 2 key items were not taken up for discussion; viz the 5-year extension to Chandrasekaran and listing of Tata Sons
• Noel Tata has been reluctant about listing Tata Sons; but it will depend on the final Upper Layer NBFC list released by the RBI