Daily Market News Update — 02nd-03rd June 2026

Midnight News Update: 02-03 Jun 2026

After reining in fiscal deficit at under 4.4% of GDP in FY26, the first month of FY27 has seen a sharp spike in the fiscal deficit. The April fiscal deficit was as high as 21.4% of the full year deficit, but that was more because there were several spillover expenses from the previous year and the advance tax collections up to March 15, 2026 had been entirely booked in FY26 itself. This situation should see an improvement once the ₹2.87 trillion RBI dividend comes into the government coffers in the May 2026 report. For now, the FY27 target of 4.3% fiscal deficit looks like a tall order.

While inflation continues to be a big risk, the RBI is likely to pause on rates in the June policy, which will be announced by the RBI MPC on Friday, 05-June 2026. Inflation is likely to average over 5% in FY27, but the RBI is likely to hold rates for now as it cannot afford the growth engine to falter. The headline inflation is dominated by imported inflation at 7.5%, which is outside policy control. However, there is an outside chance that the RBI MPC may hike rates in the policy to curb capital outflows and to also strengthen the rupee. Inflation control may just be the second priority.

In line with global macro data presentation standards, India is starting its transition from WPI to PPI (producer price index). For a period of 5 years, the DPIIT will publish the WPI index and the PPI index values simultaneously and after 5 years, the WPI will be fully scrapped. The PPI covers input, output, and services too; giving businesses a more comprehensive view of supply side inflation. The idea of gradual phase-out is that most businesses still use the WPI index for contract pricing and price-escalation clauses. A phased shift, will allow businesses to adjust seamlessly.

Cholamandalam Finance is eying a gold load book of ₹4,000 crore in FY27. That will more than double the gold loan book as it looks to diversify from its core focus on vehicle financing. Chola Finance had closed FY26 with a gold loan book of ₹1,800 crore. FY26 was just the first year of its presence in the gold loans business. FY26 saw a sharp spike of 50.4% in the all-India outstanding gold loans basket. Even as credit conditions tightened, the rising price of gold and the keenness of financiers to extend back-to-back loans has made gold loans a lot more attractive to NBFCs.

For financial year FY26, the Adani group posted record capex of $16 billion or ₹1.50 trillion, even as the group touched all-time high EBITDA of ₹94,834 crore in the fiscal year. Over the last 4 years since the short-selling crisis hit the group, Adani companies have managed to build their core infra businesses and also reduced debt levels. The group has a gross asset base of $83 billion; largely focused on energy, utilities, transport, and logistics. Some of its big projects included the Navi Mumbai Airport, Guwahati terminal, Ganga Expressway, and an integrated copper smelter.

Fintech lenders are quietly dominating the lending volumes, especially in the small-ticket personal loans business. In FY26, the fintech lenders accounted for nearly 75% of the number of personal loans disbursed. Of course, they would be much smaller in value terms. The good news is that these fintech players are also seeing their asset quality improve rapidly. Most fintech lenders use automated credit assessment models that are able to sanction and disburse small ticket loans in less than 24 hours. At least in terms of numbers, the fintechs are starting to dominate lending.

PRISM, the parent company of OYO Rooms, has got SEBI approval for its proposed ₹6,650 crore IPO. The IPO will entirely be a fresh issue of shares. The IPO is expected to value the company in the region of $8 billion overall. The updated DRHP is likely to be filed by July and the issue will happen after that. In a tough market, a digital IPO will surely test waters in the primary markets. It may be recollected the company had done a confidential filing in December 2025, wherein the issuer is only required to disclose basic details to the public. This helps maintain confidentiality.

India has recently dropped 2 places in the global market cap rankings. About 2 weeks back, Taiwan overtook India, and now South Korea has also overtaken India in terms of market cap. One argument is that these rallies are too narrow. For instance, in Taiwan, the rally is dominated by TSMC; while in the case of South Korea it is Samsung Electronics and SK Hynix. However, these focused companies are also reflective of how India failed in creating an industrial base in chips and semiconductors, as India focused more on the low-hanging fruit of IT outsourcing.