Weekly Market Impact — for the week ending 04th September 2026

Weekly Capsule (Aug 31 – Sep 04) and Impact Analysis

India Q1FY27 GDP growth comes in at 7.8%, GVA growth at 8.2%

• The nominal growth crossed into double digits this quarter, so real GDP growth was robust despite higher GDP deflator
• Despite the global macros and supply chain constraints, the GDP growth was 50 bps better than street estimates

Agriculture continued to lag in Q1FY27; manufacturing and services made up

• Agriculture grew 3.6% in real terms; and manufacturing grew 9.2% while financial services and realty grew at 12.2%
• While there have been some differences over changing the base year; the impact of such changes work both ways

RBI reported record collections of $127 billion via FCNR(B) special window

• The flows have almost doubled from the levels reported on 21-August, showing a big back-ended surge in NRI inflows
• While there were rollovers and NRE account recycling, a lot of fresh NRI money has also come in through the window

As FCNR(B) special window closes; ECB and OFCB windows are open till 31-Dec

• Unlike in case of FCNR(B), the RBI is only offering partial hedging assurance in the case of ECBs and OFCBs
• FCNR(B) has average annual cost of 3%, so over a 5-year period, RBI will have to bear hedging cost of over $19 billion

FY27 fiscal deficit stands at 26.8% of full year target at the end of July 2026

• The CGA data showed a sharp surge in non-tax revenues, which currently stands at 50% of the tax revenues for FY27
• As tax revenues struggle to grow; government may rely more on RBI dividends, PSU disinvestments, and asset monetization

HDFC Bank NRC and RBI to widen the search for the next CEO of the bank

• The bank is left with just 2 months to appoint the next CEO as Sasidhar Jagdishan will not be seeking another term in office
• While second-in-command, Kaizad Bharucha, is a likely name; the NRC and RBI may look at a much wider selection spectrum

Happiest Minds to merge into ITC Infotech through stock-swap method

• As a starting point; the promoter Ashok Soota will sell his 22.11% stake to ITC Infotech for a sum of ₹1,330 crore
• Shareholders of Happiest Minds will receive 25 shares of ITC Infotech for every 81 shares of Happiest Minds held by them

Reliance Consumer forays into ice-cream business via Bombay Creamery

• The focus will be on premium ice-creams at an affordable cost, with entry level costs being as low as ₹10 per piece
• RCPL will look to leverage on its unique positioning and its strong distribution muscle to make inroads into the business

FPIs infuse $3.11 billion into Indian stocks in August, as buying returned

• FPI buying was seen in August in Financial Services, Consumer Services, Healthcare, IT, Consumer Durables, and Auto
• FPI selling was also witnessed in sectors like Telecom, FMCG, Oil & Gas, Power, and Realty; albeit fairly modest levels

Air India likely to receive ₹10,000 crore cash infusion from Tata Sons and SIA

• While Tata Sons holds 74.9% stake in Air India, the balance 25.1% stake in Air India is held by Singapore Airlines
• Both, Tata Sons and SIA, have reiterated their commitment to Air India for the long term; in terms of funds and bandwidth

USDINR hardens sharply to ₹94.38/$ for the week on deluge of FCNR flows

• The rupee is now positioned at a much more comfortable level, as compared to the May 2026 lows of ₹96.90/$
• The FCNR(B) inflows of $127 billion was a positive surprise; but it also allows the RBI to intervene freely to defend the INR

Brent crude spikes to $97.62/bbl before settling for the week at $95.85/bbl

• The continued uncertainty and the persistent attacks by the US and Iran on military facilities kept oil prices under stress
• However, with low demand and new alternative routes emerging, the upside for oil prices could be capped from here

FPIs begin September on a cautious note; with equity selling at $782 million

• FPIs were also sellers in debt; so, the overall selling in the Indian markets in September was around $1.08 billion
• The deluge of FCNR(B) flows do not seem to have worked to shore up the confidence of FPIs; but we may have to wait

Spot Gold falls to $4,430/oz, while Spot silver also fell to $66.28/oz this week

• Precious metals markets have been jittery after the hawkish comments made by Fed Chief, Kevin Warsh, at Jackson Hole
• Apart from higher rates, major economies returning to higher growth levels has also reduced the safe haven demand

SEBI has cleared the NSE IPO and also issued the observations letter to NSE

• RHP filing and price band announcement by NSE are expected in the coming week with IPO listing before end of September.
• At ₹30,000 crore, the NSE OFS will be the biggest IPO ever, and is likely to soak up a lot of liquidity available in the market

Markets are expecting a major rush of nearly 30 IPOs before 30-Sep deadline

• For regular IPOs, SEBI approval is valid for 12 months, while for Confidential Filings, the approval is valid for 18 months
• The coming week itself will see more than 10 IPOs opening, as expiry of approvals means starting filing process all over again

Forex reserves expand by $11.5 billion this week after $12.4 billion last week

• At $740 billion, the forex reserves are already at an all-time high and full FCNR(B) flows will come only by 11-September
• It is expected that by the time the full FCNR flows are swapped by banks, forex reserves should cross $800 billion

Norges Bank, the $2.3 trillion Sovereign Fund, will cut holdings in US treasuries

• Norges Bank will diversify its bond holdings by cutting US Treasuries from 34.1% to 21.9% of its sovereign bond portfolio
• It will use the funds released to invest in higher-yield US private bonds portfolio as well as in Japanese Treasuries

Banks offer semi-fixed loans to fully deploy the liquidity glut in banks

• Banks are protecting margins with mortgage loans that are fixed for a period; and then variable; for predictable margins
• The cost certainty should also appeal to the customers at a time when rates are expected to be hiked amid rising inflation

Trump plan to impose 100% tariffs on India, China, Turkey; meets opposition

• This move was to discourage these countries from procuring oil from Russia; with China and India the biggest buyers
• US Senate concerns were that such a move could push up fuel prices in the US and spike consumer inflation even further

New RE units in India have to store 10% of RE power for 2 hours mandatorily

• That was really called for after India’s RE capacity expansion was not being matched by adequate storage capabilities
• New plants commissioned after July 2027 will also have to mandatorily co-locate such storage; according to the CEA