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India Market Weekly: GST Surge, War Impact & FPI Selloff
Research Desk4 April 20266 min read
India weekly market update: GST crosses ₹2T, FPI selloff continues, crude volatility, rupee surge, and US-Iran war impact on economy.
Weekly Capsule (Mar 30 – Apr 03) and Impact Analysis
| News Announcement | Impact Analysis |
|---|---|
| GST collections for March 2026 cross ₹2 trillion, only for the third time ever | The surge in GST collections for March was largely led by a surge in import-related GST collections to ₹53,861 crore This pertains to the economic activity of February, so the next month GST collections may reflect the US-Iran war impact |
| Donald Trump to walk out of NATO after Europe refuses to support the war | This would largely mean that the European nations will now have to start spending on taking care of their defence needs This opens up a huge export opportunity for Indian defence companies; where exports are already rising in recent years |
| Car sales in FY26 hit an all-time high of 47 lakh units, 8% above the last fiscal | The auto sales in India were helped by the sharp cuts in GST ahead of the festive season in the previous calendar year While M&M, Toyota, and Tata Motors reported best growth in car sales, Hyundai reported -3.54% contraction in sales |
| Compound annual growth rate of Nifty over 20 years falls below 10% mark | This is only the second time in the 30-year history that the Nifty 20-year returns have fallen to single-digits While the Nifty sell-off was triggered by STT hike on F&O in the Union Budget, the Iran war was the market depressant |
| Indian banks cannot hold net open rupee positions beyond $100 million | This is a sharp reduction from the current limit of 25% of capital; and led to fears of substantial unwinding of positions However, in most cases, the positions have been transferred from the books of the bank to the corporate, limiting impact |
| In his Harvard speech this week, Powell highlighted the inflation risks from oil | While Powell spoke about inflation risks, he hinted more at holding rates steady, than about increasing the Fed rates This was welcomed by the markets as the traders were broadly expecting the Fed to hike rates to combat inflation |
| India fiscal deficit for 11 months of FY26 stood at 80.4% of full year target | Revenue targets for the year are 18% short with one month to go, but the government will use advance taxes to meet target However, with expenditure also having 20% leeway in the last month, it looks like 4.4% fiscal deficit should be achievable |
| India IIP growth for February 2026 picks up by 40 bps over Jan-26 to 5.2% | The thrust came from the manufacturing IIP (with 77.6% weight); even as mining and electricity output fell The products under pressure continued to be export items, although some of the export products are turning around |
| PMLA to prevail over Banking Rules in the case of proceeds of crime | That means that even if assets from proceeds of crime are hypothecated to banks, government has the first claim Unlike in the past, banks cannot monetize defaults through tainted assets, as the PMLA will take precedence in this case |
| USDINR strengthened on Thursday from ₹95.22/$ to ₹92.68/$ | The first trigger came after the RBI underlined that its $100 million open position limit will be effective from 10-April RBI also curbed arbitrage positions between onshore and offshore, even as buying in IT stocks boosted the rupee too |
| Despite just 2 FPI reporting days in the week, FPI selling was ₹23,802 crore | After selling $12.7 billion worth of equities in March 2026, FPIs continued the trend; selling $2.1 billion on 02-April Clearly, the geopolitical risk is triggering a risk-off response from global investors, although currency may offer support |
| Since the war started, India 10-year bond yields spiked from 6.66% to 7.13% | Aggressive selling in the bond markets has also been a key trigger for the spike in yields, apart from inflation risks Yields got a leg-up after Goldman Sachs suggested that the RBI may hike rates by up to 50 bps to control inflation |
| Gold recovered to $4,676/oz, and silver also recovered to $73/oz this week | The bounce in gold and silver was triggered by some short covering after the sharp fall since the peaks of 29-January With Powell’s Harvard speech hinting at stable interest rates, gold and silver rallied as rate hike expectations reduced |
| Brent Crude closes a volatile week at $109.03/bbl, with no end to war seen | On 01-April, Brent Crude fell from $118/bbl to below $100/bbl after clear signals that the US wanted to end the Iran war soon However, with Iran setting tough conditions and US-Israel attacks continuing, crude oil spiked back to $109/bbl |
| Another global fund house exits India as PGIM to sell out to TVS group | Indian mutual funds have grown to ₹83.4 trillion this buy gives the TVS group access to an AMC with AUM of ₹30,000 crore Apparently, Groww and Edelweiss had also been in the fray for PGIM; as MF AUM is expected to grow exponentially |
| Government notifies international valuation standards adoption for IBC | The lack of a global valuation benchmark has been one of the major drawbacks, leading to low confidence in the IBC process The decision by the Committee of Creditors (COC), NCLT, and the potential bidders will be based on global valuation norms |
| Indian defence exports up 63% you to ₹38,424 crore in fiscal year FY26 | This reflects a near 3-fold growth in defence exports in the last 3 years as the demand for Indian defence products increases If the US walks out of NATO, Indian defence companies can look forward to big export orders from Europe in future |
| India implements sharp cuts in customs duties to counter the Hormuz crisis | These duty cuts are targeted at benefiting sectors that were dependent on petrochemical feedstocks and intermediates Sectors like plastics, paints, packaging, textiles, pharma, chemicals, and automotive components will be the gainers |
| In a drastic move, Oracle cut 30,000 jobs globally, with 12,000 in India alone | The total job cuts are nearly 20% of the global workforce, while nearly 50% of the Indian workforce has been laid off For some time, Oracle had been goading its employees to focus more on AI and emerging technologies to stay relevant |
| India housing demand falls below 1 lakh for the first time in last 5 years | One of the big reasons was the slowdown in new project launches as builders turn cautious amid falling buying power The two markets which defied the trend were Bengaluru and Delhi/NCR; with Bengaluru market expanding 16% QOQ |
| Government has opened up 80,228 SQKM area for oil and gas exploration | The blocks on offer include 12 inland blocks, 4 shallow water blocks, 1 deepwater lock, and 4 ultra-deepwater blocks The ideas is to improve self-sufficiency percentage in oil and gas, so that a crisis like the US-Iran war can be mitigated |
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