Weekly Market Impact — for the week ending on 05th June 2026

Weekly Capsule (Jun 01 – Jun 05) and Impact Analysis

India Q4FY26 real GDP growth came in higher than expected at 7.8%

• This was much better than the street expectation of 7.4%, due to the last quarter pressures of the ongoing US-Iran war
• While real services growth flattered at 9.9%, manufacturing was sedate at 7.3%, while farm output was lower at 3.6%

Nominal growth in Q4FY26 showed pressure due to weak farm output

• Nominal growth (before inflation) is more relevant when it comes to overall economic activity and employment creation
• The services sector showed 12.9% nominal growth, led by trade, hotels, transport, financial services, and realty services

For fiscal FY26, nominal growth was lower at 8.9%; real growth was 7.7%

• Nominal growth was lowest in 3 years, but real growth improved in FY26, thanks largely to low inflation levels
• The concerns for FY27 will be that the advantage of low inflation will not sustain amidst rising crude oil and food prices

RBI Monetary policy presented on Friday held repo rates at 5.25%

• While higher inflation had made a case for rate hikes, MPC wanted to wait and watch as nominal growth was faltering
• There are dual concerns on inflation and growth amid falling rupee, supply chain constraints, and weak monsoons

RBI MPC raises its inflation forecast for FY27 and lowers GDP growth forecast

• Inflation forecast for FY27 has been raised by 50 bps to 5.1%, making the inflation peg 90 bps higher across last 2 policies
• GDP growth forecast for FY27 has been lowered by 30 bps to 6.6%, making real GDP peg 80 bps lower over last 2 policies

RBI announces a full series of special measures to boost forex inflows

• While FPI investments in G-Secs will be free of LTCG tax, the FAR route is being substantially expanded across G-Secs
• NRIs / OCIs get higher trading limits without registration in equity; and special FCNR (B) scheme with hedging covered

IIP growth for April 2026 jumped to 4.9% in the new 2022-23 base series

• The new series saw robust growth across Manufacturing at 6.2% Electricity at 4.9%, and Water supply at 6.6%
• However, mining and quarrying disappointed for the month of April 2027; contracting -5.7% for third month in a row

FY26 fiscal deficit contained at 4.4% target, but FY27 could be a problem

• In fact, April 2026 saw 21% of full year fiscal deficit being touched in 1 month due to spillover spending in the month
• However, this should improve with the ₹2.87 trillion RBI dividend in May, and improvement in tax inflows

Rajesh Exports comes under the SEBI lens over ₹15 trillion fictitious sales

• This investigation was again missed out by the auditors, but an investor had highlighted this anomaly to the regulator
• Most of the sales of Rajesh Exports were booked in the names of foreign companies, which in most cases were fictitious

India’s GCC lure grows with T-Mobile of the US the latest entrant to Hyderabad

• T-Mobile of the US just set up a global capability centre (GCC) in Hyderabad spanning 2.50 lakh SFT and employing 1,000
• Hyderabad has become a magnet for GCCs due to its trained manpower, strong GCC ecosystem, and lower living costs

TCS stock price touches a 6-year low after it crashed nearly 9% on 03-June

• The crash was seen across IT stocks after fears driven by the view that Anthropic could make most outsourcing redundant
• TCS has lost nearly 25% market cap in the current calendar year and is at a 30% discount to its 10-year average P/E ratio

UAE becomes India’s second largest oil exporter, racing ahead of Saudi Arabia

• While Russia is still the largest oil exporter to India at 1.9 million bpd, UAE sent 5.40 lakh bpd of oil to India
• Even as the Straits of Hormuz was blocked, UAE used the Fujairah and Yanbu pipelines to skirt the Straits of Hormuz

Small cap and mid-cap funds get the better of large cap funds in 2026

• While small caps funds returned 8.84% in last 3 months, mid-cap funds gave 3.83%, and large cap funds lost -3.22%
• Smaller companies have lower debt and are less vulnerable to global macros; making them a better bet in these conditions

ED raids Vedanta facilities over FEMA violations regarding royalty payments

• ED has stated that royalties paid by Vedanta Ltd to Vedanta Resources UK was not in sync with FEMA requirements
• Vedanta was recently in the news for taking on Adani group over the special treatment in acquisition of Jaypee group

India will be shifting from WPI to PPI (producer price index) for input prices

• PPI is the global standard and includes input, output as well as services, which are not currently part of the WPI
• However, the WPI and PPI will be published together for 5 years, before scrapping WPI, to ensure a smooth transition

Amid rupee concerns, most gold ETFs shut doors to large investment flows

• Since gold ETFs have to be backed by equivalent physical gold, big gold ETF orders result in higher imported gold demand
• This restriction will only be for very large ticket size flows, while most of the existing flows and SIPs can continue

Centre creates ₹10,000 crore ATF Fund to stabilize ATF prices for airlines

• This fund will be used to take care of the under-recoveries that OMCs are currently facing on supply of ATF to airlines
• This will be a self-liquidating fund, with the government recovering the money when ATF prices come down

Vanguard cuts Ola valuations to $70.3 million; 99% below its peak 2021 value

• Vanguard has highlighted risk factors like slowing revenues, rising competition, and sustained losses in key markets
• This creates a challenge for the Ola promoters, who were looking at an IPO to offer exit route to early investors

Wockhardt’s Zaynich antibiotic, gets US FDA approval; boost for drug discovery

• Zaynich is meant to combat multidrug-resistant pathogens, and can spur more Indian pharma players into drug discovery
• This is special as it is the first new chemical entity fully developed in India ( and never used in humans before)

Tata Sons infuses ₹5,166 crore into its Tata Teleservices arm for AGR dues

• Out of this infusion, Tata Teleservices has already paid ₹3,517 crore as pending AGR dues to the government
• The latest infusion increases the stake of Tata Sons in Tata Teleservices to 94.3%, holding support to cutting edge sectors

BHEL bags a massive ₹21,000 crore mega power plant order in state of UP

• BHEL will undertake the design, engineering, manufacture, supply, construction, testing and commissioning of EPC pack
• BHEL secured this order through an international competitive bidding process, and project will be completed in 70 days