Daily Market News Update — 11th-12th May 2026

Midnight News Update: 11-12 May 2026

A day after PM Modi called upon Indians to adopt austerity measures like cutting down on gold purchases, cutting use of fuel, and reducing foreign travel; the markets crashed. It interpreted the statement by the PM as an admission of a bigger macro crisis in Indian public finances. For the Sensex which fell more than 1,300 points, it was the sharpest fall since March this year. The dead-lock in the US-Iran peace talks and the spike in oil prices also made it tougher for markets. Even the rupee closed at a record low of ₹95.31/$. Jewellery and property stocks were hit hard.

As terms of trade get unfavourable for India, the centre is planning a slew of measures. These include curbs on gold and electronic imports, limits on forex spending etc. With Brent Crude having risen from $70/bbl to $105/bbl, it is starting to pinch the current account deficit. However, the government is not planning to hike retail prices of petrol and diesel, due to its inflation potential. Cutting the trade deficit will help to stabilize the rupee, which dipped to an all-time low on Monday. With the Bengal victory, the NDA can afford to take its chances with tough measures.

According to the Petroleum Minister, Hardeep Puri, oil marketing companies (OMCs) might suffer under-recoveries to the tune of ₹2,00,000 crore due to the spike in crude. The under-recoveries occur when the market prices do not rise in tandem with the rise in crude prices. Crude is up 50% in the last 2 months, but the retail prices of petrol and diesel have remained static. While the street has been expecting a hike in petrol and diesel prices, that has not yet happened. The impact of under-recoveries have been partially offset by the government via excise duty cuts.

The Iran war brought fresh inflation pain for the FMCG companies. Most of the FMCG products use crude oil intermediates as key inputs and that is where input inflation is hitting. FMCG players have resorted to different strategies to counter this cost-push impact. While most FMCG companies have opted to pass on the cost-hike to the consumers, there are others who preferred to reduce the pack sizes. There have been several hits on costs. While crude linked inputs have gone up sharply, freight, insurance and packaging costs are also up sharply for FMCG companies.

Mutual funds saw net inflows of ₹3.22 trillion for April 2026, led by debt fund inflows of ₹2.47 trillion for the month. Net inflows into equity funds, hybrid funds, and passive funds contributed the balance. Debt fund flows were led by liquid funds, where the inflows surged after the quarter ending in the previous month. Both active equity and active debt funds saw a sharp accretion in AUM for April 2026. Hybrid schemes saw inflows of ₹20,565 crore while passive funds saw net inflows of ₹20,082 crore. Flexi-cap funds remained the biggest contributor to equity fund flows.

Gross SIP flows in April 2026 stayed robust at ₹31,115 crore, albeit lower than March flows. FY26 saw overall SIP flows of ₹3,49,589 crore. Total number of outstanding SIP accounts were marginally lower at 1104.26 lakh accounts. For the second month in a row, the SIP stoppage ratio was above 100%, with the April SIP stoppage ratio at 101.14%. The total SIP AUM as of the close of April 2026 went up sharply from ₹15.11 trillion to ₹16.85 trillion. Overt the last few months, even as SIP flows have been robust at gross level, the rising SIP stoppage ratio is a subject needing attention.

Finance Minister approved the hiking of fertilizer subsidies budget by up to ₹15,000 crore in the first quarter of FY27. The idea is to take care of the spike in imported fertilizer prices ahead of the sowing season. The government has also ensured an increase in fertilizer availability by 21 lakh tonnes. Currently, the subsidies are disbursed to fertilizer companies on a weekly basis. The prime minister has also appealed to the farmers to reduce the use of artificial fertilizers, although the fertilizer inventories are higher this year. India is boosting domestic production of fertilizers.

Even as Gold has been hovering in the zone of uncertainty, Silver is seeing a rapid rally. On Monday, even as gold was under pressure, silver rallied by 6% to $85.50/oz. However, silver still continues to be sharply lower than its late January peak of $121/oz. A lot will depend on Fed policy, since interest rate cuts are normally conducive to a surge in gold and silver prices as it reduces the opportunity cost of holding them. Both gold and silver happen to be safe haven metals, although silver also has extensive industrial applications in RE, space technology, electronics etc.