Sebi offers a way over FPI tax rule hurdle
A blazing rally in India’s short-end bonds, driven by plans to attract foreign capital, may fizzle out because the central bank is expected to drain excess cash from the financial system, according to analysts.BofA Securities and Bandhan AMC Ltd. expect the Reserve Bank of India to step up short-term cash withdrawal operations in coming months as surplus banking liquidity is seen climbing to pandemic-era levels of about 8 trillion rupees ($85 billion). DBS Bank Ltd. expects the central bank to deploy a stronger tool in August by requiring banks to keep a larger proportion of deposits with the RBI.
Indian government bonds edged slightly lower in early trade on Thursday after the U.S. Federal Reserve struck a more hawkish tone than expected, with most policymakers now projecting the start of a rate-hiking cycle before year-end. The yield on the benchmark 6.94% 2036 bond rose to 6.8639% by 10:20 a.m. IST from its previous close of 6.8626%. Yields move inversely to prices. "Bulls will take a backseat for now, as the current levels are bound to react more to negatives, with all positives priced in," trader with a primary dealership said.
About $26 billion worth of shares across 71 recently listed companies will become eligible for sale between June 17 and September-end as IPO lock-ins expire, according to Nuvama Alternative & Quantitative Research. The lifting of these lock-ins could create a potential supply overhang for several stocks, said analysts. Of this, shares worth about $15.96 billion across 31 companies that mostly made their stock market debuts in the last six months are slated to become eligible for sale over the next month, said Nuvama Alternative's head Abhilash Pagaria. The list includes ICICI Prudential AMC, Vishal Mega Mart, Inventurus Knowledge Solutions, Sai Life Sciences, Nephrocare Health Services and Oswal Pumps.
Uncertainty isn't a passing phase anymore, it's the new normal for investors. That was the core message from wealth management leaders at the ET Alpha Wealth Summit, where a panel of top industry voices including Rajesh Saluja, Co-Founder, CEO & MD, ASK Private Wealth, Nilesh Shah, Group President & Managing Director and Kotak Mahindra Asset Management Company (KMAMC) broke down how India's affluent investors are repositioning their portfolios for a world of constant geopolitical and economic flux. The topic of discussion was 'Global or Local? The New Allocation Reality'. "Resilient, not return-maximizing" portfolios are the new goal Rajesh Saluja, Co-Founder, CEO & MD of ASK Private Wealth, told the audience that decades of market shocks, from the Asian crisis to the pandemic, have taught wealthy investors one lesson: chasing the highest possible returns is a losing game. Instead, the focus has shifted to building portfolios that can absorb shocks without falling apart.
The green economy—the business lines of global listed companies that generate revenue from climate solutions — now boasts a record high market value of $10 trillion. The increase occurred as revenue tied to environmental products and services climbed to $5.5 trillion last year, expanding at its fastest pace since 2022, according to a report published Wednesday by London Stock Exchange Group. Investors have rewarded that growth: Companies deriving over 20% of their income from green activities have been outperforming the broader equity market, LSEG said. The S&P Global Clean Energy Transition Index has surged more than 80% since the end of 2024, more than double the return of the S&P 500.
The Indian rupee is set to open weaker on Thursday after a hawkish surprise from the U.S. Federal Reserve boosted bets of an interest rate hike later this year. The rupee is expected to open in the 94.70–94.75 range on Thursday, traders said, after settling at 94.5250 in the previous session. Fed policymakers struck a more hawkish tone than expected late Wednesday, with nine of 18 projecting at least one rate hike in 2026. Economists had anticipated far fewer, with Goldman Sachs saying it expected around three members to signal a hike. Goldman Sachs further flagged the Fed’s inflation outlook, noting the median projection for 2027 core PCE inflation (Q4/Q4) was set at 2.5%, above its 2.3% estimate. The meeting raises the risk of interest rate hikes later this year, the bank said in a note. However, their base case for now remains that the Fed will leave the policy rate unchanged this year.
The Reserve Bank of India’s (RBI) decision to allow banks to lend directly to Real Estate Investment Trusts (REITs) is expected to improve access to long-term capital, lower borrowing costs and reduce the sector’s dependence on the corporate bond market, according to the Indian REITs Association (IRA). The RBI on Wednesday issued a framework permitting banks to lend directly to REITs and Infrastructure Investment Trusts (InvITs). Under the norms, banks can lend only to Sebi-registered REITs with at least 80% of their underlying assets generating positive cash flows for at least one year. The aggregate exposure of all banks to a REIT, along with its underlying special purpose vehicles (SPVs) and holding companies, has been capped at 49% of the trust’s asset value. The norms will come into effect from October 1, or earlier if adopted by banks.
Foreign institutional investors have not walked away from Indian equities, they've simply rotated their bets, Samir Arora, Founder and Group CIO of Helios Capital Management, said at the ET Alpha Wealth Summit, delivering one of the sharpest macro reads on India's market narrative in recent months. The $200 billion rotation nobody is talking about Citing data from an ICICI report, Arora revealed a striking structural shift in foreign portfolio behaviour. Four years ago, heavyweight names, HDFC, Reliance, Infosys, TCS, Kotak, Bajaj Finance, and Hindustan Unilever, collectively made up around 40% of the total foreign institutional investor (FII) portfolio in India. Today, that share has nearly halved to roughly 20%.
The Reserve Bank of India allowed all foreign individual investors to buy shares in domestically listed firms directly, implementing a budget proposal and expanding access beyond non-resident Indians (NRIs) and overseas citizens of India (OCIs). This comes at a time when foreign portfolio investors (FPIs) have been pulling money out of Indian equities, adding to pressure on the rupee. The RBI said Monday evening that overseas individuals can invest in equity instruments of listed firms on recognised stock exchanges with enhanced limits, marking a further liberalisation of India's foreign investment regime. KYC Checks This potentially widens the investor base for domestic equities. Such individuals currently bet on Indian markets mainly through pooled investment vehicles managed by foreign institutions, alternative investment funds, mainly Category III, or via limited NRI channels.
Foreign portfolio investors (FPIs) stepped up purchases of Indian government securities after the government and the Reserve Bank of India (RBI) announced measures to attract foreign capital inflows. FPIs bought ₹11,087 crore worth of government securities through the fully accessible route (FAR) over the past week following the June 5 announcements. So far in June, FPIs have made net purchases of ₹15,895 crore in government bonds — the highest in 15 months. This follows moderate inflows of ₹5,693 crore in May and ₹5,081 crore in April. In contrast, March witnessed a record outflow of ₹17,688 crore amid heightened global uncertainty following the onset of the war.
Market intermediaries are likely to face a liquidity squeeze in the near term after the Reserve Bank of India’s (RBI) tighter lending norms come into effect from July 1. Industry estimates suggest the measures could impact market liquidity by ₹50,000-₹60,000 crore and significantly raise the impact cost for foreign portfolio investors (FPIs) and mutual funds. Consequently, leverage among market intermediaries will get curtailed and make liquidity provision more capital intensive. According to Ketan Marwadi, member of the Commodity & Capital Market Participants Association of India (CPAI), around ₹50,000 crore of liquidity could be affected once the new norms are implemented. He said clearing corporations have around ₹11 lakh crore in collateral, including nearly ₹1.2 lakh crore through bank guarantees and around ₹1 lakh crore through intra-day facilities.
The government may consider additional measures to attract foreign capital, Finance Minister Nirmala Sitharaman indicated on June 15, saying recent tax relief announced for sovereign debt was "not the end of the story". "We believe the bond market can be a good way to absorb the capital coming in. As of now we have done it only for government securities," she said. "Certainly, that is not the end of story. We recognise we need more foreign capital coming in," Sitharaman added at the Mindmine Summit 2026 in New Delhi. The Finance Minister said India sees the bond market as an important channel to absorb overseas capital but noted that reforms so far have been limited to government securities. "Between RBI, government we have analysed and taken steps towards capital gains tax, withholding tax," Sitharaman said at the Mindmine Summit 2026.
Foreign investors remained sellers in Indian equities, dumping more than Rs 62,853 crore of shares in the first fortnight of June amid heightened geopolitical tensions, concerns over global economic growth and persistent weakness in the rupee. With the latest outflows, total withdrawals by Foreign Portfolio Investors (FPIs) from Indian equities have surged to Rs 2.87 lakh crore so far in 2026, surpassing the Rs 1.66 lakh crore pulled out during the entire calendar year 2025, according to data from the National Securities Depository Ltd (NSDL). Factors Driving FPI Outflows Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said FPI flows in the coming week will depend on developments in the US-Iran peace talks, the US Federal Open Market Committee's policy decision, the Bank of Japan's rate decision and commentary from major central banks.
After seven quarters of contraction, the microfinance sector’s gross loan portfolio (GLP) posted a sequential growth of 3% to ₹3.25 lakh crore in Q4FY26, aided by a sharp recovery in disbursements and improving asset quality. On a year-on-year basis, however, the sector’s GLP remained 13% lower than ₹3.75 lakh crore reported in March 2025, according to the 57th edition of Micrometer for Q4FY26 released by Microfinance Industry Network (MFIN), a self-regulatory body for the sector. Microfinance loan disbursements rose 28% quarter-on-quarter to a seven-quarter high of ₹77,524 crore in Q4FY26. The industry had last witnessed higher quarterly disbursements in Q4FY24, when it reported a record ₹1.07 lakh crore. “We can now say that despite the tough 2 years, Industry is turning the corner as evidenced by uptick in portfolio and continued improvement in Portfolio at Risk – PAR 31-180 declining to 2.0% as of March 2026 compared to 6.3% a year ago,” Alok Misra, CEO & Director of MFIN said in a statement. He added that a significant policy development which will further strengthen this recovery is the CGSMFI 2.0 scheme of Government of India. Recent extension of the scheme till August 2026 will allow sufficient time for utilisation.
Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on Friday said the regulator is working on developing longer-term futures and options (F&O) contracts in the equity derivatives market as part of its broader effort to strengthen the derivatives ecosystem. Speaking at the ET Now Market Summit in Mumbai, Pandey said deepening the cash market remains a priority for Sebi. The regulator is reviewing the lending, borrowing and short-selling framework to improve inter-linkages between the cash and derivatives markets and enhance liquidity. Pandey also highlighted other areas under review, including the delisting framework, with the aim of ensuring a fair entry and exit mechanism for investors in the capital markets. On market volatility, the Sebi chief said fluctuations cannot be wished away during challenging periods and must instead be managed. He said the true test of markets lies in their ability to absorb shocks while protecting investors.
Indian investors looking to diversity seyond domestic markets can now ccess global stocks, mutual funds, woods and other International westment products through the GIFT ty (Gujarat International Finance ec City It's India's first smart city and International Financial Services Centm (IFSC) acting as a global hub in finance and tertionlogy offering special business zones and tax benefits to attract international companies. However, there are Investment limits, costs and regulatory requirements that levestors should understand before getting started What investment options are available through GIFT City? GIFT Chy has several outhound retail mutual funds that invest in global markets. For example, DSP Global Equity Fund launched in Sept 2025, Edelweiss Greater China Fund in March 2026 and PPFAS launched S&P 500 and Nasdaq 500 Fund of Funds from GIFT Cry in May 2026" says Ankur Choudhary,en founder and CEO Belong
Elon Musk is once again at the centre of global financial attention as his net worth surges to unprecedented levels, putting him on the brink of becoming the world’s first trillionaire. According to the latest Bloomberg Billionaires Index, his wealth has climbed to around $1.1 trillion, driven largely by a sharp rise in the valuation of SpaceX and continued strength in Tesla.I The jump has widened the gap between Musk and other global tech billionaires, reinforcing his dominance at the top of the global rich list. Musk Leads Global Rich List by a Massive Margin Recent rankings highlight just how far ahead Elon Musk has pulled from the rest of the world’s wealthiest individuals. Elon Musk: $1,331 billion Larry Page: $304 billion Sergey Brin: $283 billion Jeff Bezos: $262 billion Larry Ellison: $237 billion Michael Dell: $211 billion Mark Zuckerberg: $202 billion Jensen Huang: $170 billion Bernard Arnault: $165 billion Jim Walton: $147 billion
India's forex reserves dropped $711 million to $681.610 billion during the week ending June 5 due to a sharp decline in foreign currency reserves, according to the latest data released by Reserve Bank of India (RBI). The decline follows an increase of $938 million in the previous reporting week, when the forex reserves had risen to $682.321 billion. For the week ended June 5, foreign currency assets, that form a major component of the reserves, was down $2.704 billion to $543.444 billion, according to RBI. However, the value of gold reserves increased $1.975 billion to $114.575 billion during the week. The special drawing rights (SDRs) were up $18 million to $18.765 billion, the RBI said.
On Friday, Elon Musk’s image loomed large over Times Square from the giant TV screen of the Nasdaq stock exchange, as tourists outside snapped selfies, SpaceX investors in T‑shirts grinned at their newfound fortunes and news cameras jostled for position. “If people had told me this was going to happen, I was like, ‘man you must be smoking some really good crack,’” Musk said in a video address celebrating SpaceX going public. "I gave SpaceX less than a 10% chance of succeeding at all." Global reaction to SpaceX’s public listing - which values the company at more than $2 trillion and has made Musk the world’s first trillionaire - has spanned investor euphoria to admiration among fans and sharp criticism from politicians and members of the public who see him as a symbol of rising global inequality. At Starbase, where SpaceX launches its Starship rockets on the Texas border with Mexico, cheering fans traveled from far and wide in the hope of catching a glimpse of Musk. Lesley Varin, from Washington state, surrounded her car with stuffed toys holding handwritten signs celebrating SpaceX. One read: “Congrats Elon, Big 1st!”
India's measures to improve the attractiveness of its debt are welcome, though concerns over oil prices and their impact on the rupee remain big hurdles in drawing foreign investors to government bonds, a top official at BlackRock said. Seeking to shore up the rupee and interest in bonds, India last week announced tax cuts for overseas bond investors and a host of measures aimed at boosting inflows and improving market access. Foreign inflows into Indian debt have accelerated in the wake of steps, with some managers viewing the steps positively, particularly for India's case for inclusion in the Bloomberg Global Aggregate Index. BlackRock, however, has largely stayed out of the Indian market this year, and is not "meaningfully changing strategic exposure yet," Navin Saigal, BlackRock's head of global fixed income for Asia Pacific, said.
Elon Musk’s SpaceX has pulled off the biggest initial public offering (IPO) in US history, raising a staggering $75 billion and instantly becoming one of the most valuable companies in the world. The rocket maker priced its shares at $135 each on Thursday, selling 555.56 million shares and reaching a valuation of $1.77 trillion. The blockbuster debut puts SpaceX among the largest publicly traded companies in America, ahead of corporate giants such as JPMorgan Chase, Berkshire Hathaway, Eli Lilly, Meta Platforms and even Musk’s own Tesla. When trading begins on Nasdaq on Friday, SpaceX is expected to rank as the seventh-largest listed company in the United States. The only six US-listed giants ranking ahead of it by market capitalisation will be NVIDIA, Alphabet, Apple, Microsoft, Amazon, and Broadcom.
The rapid expansion of artificial intelligence is reshaping global credit markets as technology companies seek new ways to fund massive investments in data centers, chips and computing infrastructure. Morgan Stanley expects AI-related global debt issuance to more than double and reach nearly $570 billion in 2026, reported Reuters. The investment bank estimates that AI-related debt issuance had already reached nearly $236 billion by May 31, 2026, reported Reuters. That figure is about four times higher than the amount recorded during the same period a year earlier. Major technology companies have traditionally relied on strong cash flows to fund growth. However, the scale of investment required for artificial intelligence is pushing many firms to seek additional funding through debt markets.
The mutual fund SIP stoppage ratio has dropped to 95% in May against a stoppage ratio of over 100% for two consecutive months. In April, the SIP stoppage ratio was 101.14% whereas in March was 101.06%. The latest reading indicates that more mutual fund SIPs were registered than those stopped or whose tenures ended. The number of SIPs discontinued/ tenure completed in May were recorded at 51.70 lakh whereas the number of new SIPs registered in the same period stood at 54.16 lakh. In April, 51.29 lakh SIPs were discontinued or completed their tenure, and 50.71 lakh new SIPs were registered.
Foreign investors pulled nearly $27 billion net from emerging market portfolios in May, partially reversing a rebound in April as equity selling in Asia overwhelmed debt inflows, data from a banking trade group showed on Wednesday. Non-resident investors withdrew a net $26.6 billion from emerging bonds and stocks in May, according to the Institute of International Finance, compared with inflows of $70.6 billion in April. The reversal was driven almost entirely by equities - foreign investors pulled $37.0 billion from EM stocks during the month. Debt markets attracted a net $10.4 billion. “The month-to-month swing was large, at $97.2 bln, and shows that April's reopening did not become a straight-line normalization in capital flows,” said Jonathan Fortun, senior economist at the IIF.
As global investors gravitate towards markets, such as South Korea and Taiwan, Indian equities have slipped down the pecking order. The gloom around India is more about relative growth than absolute growth, says Ridham Desai, managing director and chief equity strategist India, Morgan Stanley. In an interview with Samie Modak and Sundar Sethuraman/Business Standard in Mumbai ahead of the Morgan Stanley India Investment Forum 2026, Desai argues that investor positioning has turned excessively bearish.
A barrage of shares is heading toward investors in India, signalling a pickup in dealmaking at the end of a subdued first half of 2026. About a dozen companies are expected to collectively raise more than 600 billion rupees ($6.3 billion) across initial public offerings, institutional placements and government stake sales in two months, creating one of the busiest periods for equity offerings this year. In another sign of the increase in activity, rapid-commerce company Zepto Ltd. has filed updated paperwork for an IPO that could raise $1 billion. National Stock Exchange of India Ltd. may be close behind with a $2.5 billion filing.
The share of early stage delinquency in microfinance loans rose in April while the sector's overall credit risk eased, data from CRIF high Mark showed. The portfolio at risk (PAR) for the 1-30 day bucket inched up to 0.8% in April from 0.6% a month prior while the ratio for 1-180 days was recorded at 2.5% as compared with 2.6% over the same period. Head of microfinance lenders said that there is no additional stress while the marginal rise in April reflects the usual slack business trend early in the fiscal. "The first quarter is always a difficult quarter for business and the rise in early delinquency is only a reflection of this," Satin Creditcare Network chairman HP Singh told ET. "Till now there is not much uncertainty around macroeconomic conditions and resultant impact on microfinance," he said.
Foreign investors have purchased nearly 10,000 crore of Indian bonds over the past four trading sessions following the government’s decision to fully exempt taxes on gains from eligible debt investments and the central bank decision to expand the investable universe, data published by CCIL showed. Bond yields have cooled in tandem. This marks a significant reversal from the stance taken by foreign investors that had been pulling out from India’s debt and equity markets in the recent months. Since the start of the US-Israel war on Iran, FPIs have net sold over 10,119 crore of debt.
India's decision to exempt foreigners from taxes on government bonds and broaden access to the debt market is expected to make the country more attractive to overseas investors, catalyse fresh inflows and strengthen its case for inclusion in global indexes. On Friday, policymakers unveiled a wide-ranging set of measures to draw in overseas capital while shoring up the currency and external balances, which have been strained by higher oil prices. They scrapped withholding and capital gains taxes on foreign investments in government bonds, broadened the pool of securities that are available without investment limits and introduced incentives to encourage banks to raise foreign currency deposits from non-resident Indians and for companies to tap overseas borrowings. The slew of measures, rolled out in response to the oil shock that has hit Indian assets, is beginning to lure foreign investors back into an overlooked market against a backdrop of rising global rate volatility.
Net inflows into equity mutual funds dropped sharply by 40.4% month-on-month in May 2026, reflecting a more cautious investor mood amid heightened market volatility, geopolitical tensions, inflation worries, and pressure on the rupee, according to the latest AMFI monthly data of May 2026. According to AMFI data, net equity fund inflows fell to Rs 22,907.77 crore in May, the lowest level in 12 months, from Rs 38,440.20 crore in April, a decline of Rs 15,532 crore in just one month. The sharp plunge has come after months of strong retail participation and suggests that investors turned more selective amid uncertainty in domestic and global markets. During May, investors had to contend with concerns around rising geopolitical tensions in West Asia, volatility in crude oil prices, inflation risks, fluctuations in the rupee, and sharp swings in equity markets.
The Indian Rupee posted sharp declines, sliding further into the 95 to the dollar levels, weighed by renewed geopolitical tensions, which led to a surge in oil prices. The currency ended Monday’s trade at 95.70 per dollar, down 0.8% from its previous close, marking one of its biggest single-day falls in nearly four weeks. Despite the spate of measures announced by the RBI on Friday to attract foreign capital, the currency opened on a weak note at 95.32 per dollar, and traders reported that the central bank stepped in to help curb its fall. “RBI was not in the market to protect the rupee until it fell to 95.70,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP.
The big story of the day is the big block deal across Adani Group companies. GQG Partners Emerging Markets Equity Fund offloaded shares in Adani Enterprises and Adani Energy Solutions’ equity shares via block deals. These shares were bought entirely by SBI Mutual Fund. On June 05, GQG Partners sold 1.64 crore shares, 1.26% of Adani Enterprises’ total market capitalisation, at an average price of Rs 2,913.40, totalling the stake sale at Rs 4,789.62 crore. Another block deal was of Adani Energy Solutions, where GQG Partners sold 63.65 lakh shares at an average price of Rs 1,504.80. SBI Mutual Funds bought these shares for the same price. Taking the total deal price at Rs 957.93 crore. About GQG Partners GQG Partners is a global investment firm that is a prominent shareholder in the Adani Group. The firm is led by Chief Investment Officer Rajiv Jain. GQG famously took a contrarian stance by purchasing massive stakes in various Adani companies when their stock prices plunged in early 2023 after US-based short seller Hindenburg Research struck the Adani Group.
The FII outflows from Indian equity markets continue. Foreign portfolio investors net sold Rs 42,927 crore worth of equities in the first week of June alone. Experts believe a convergence of global capital rotation toward artificial intelligence opportunities and a sharply weaker rupee continued to erode the investment case for India. The week’s outflows take total FPI selling in 2026 to Rs 2.67 lakh crore exceeding the full-year figure of Rs 1.66 lakh crore recorded in 2025, according to National Securities Depository Ltd (NSDL) data. The scale of the exit is significant: India is no longer just facing a pullback, it is absorbing a structural reallocation of global money.
The Centre’s and the Reserve Bank of India’s recent measures to attract foreign capital inflows are expected to ease pressure on the rupee and arrest its one-way slide, but a sharp appreciation remains unlikely amid persistent geopolitical uncertainty, market participants said. Most analysts expect the rupee to trade in a range of 94-96 against the dollar in the near term, with further movement dependent on geopolitical developments and the scale of inflows generated by the measures. A FE poll of nine respondents found that 66% do not expect the rupee to strengthen beyond the 94-per-dollar mark in the near future.
India plans to make a renewed pitch for inclusion of its sovereign debt in major global bond gauges, including the Bloomberg Global Aggregate Index, after exempting foreign investors from capital gains and withholding taxes and vastly widening the investable pool of long-dated securities, officials said. Reserve Bank of India (RBI) and finance ministry officials may also reach out to the Basel-based Bank for International Settlements (BIS) for talks, they said. BIS has been given a special tax-exempt status in the latest rejig. BIS invests significantly in government securities (G-secs) and enjoys tax-free status everywhere.
India is making an attempt to woo foreign portfolio investments (FPIs) to the government securities (G-Secs) market at a time when the market has been seeing weakness. On Friday, the government announced the exemption of 12.5% long-term capital gains tax on investments in G-Secs by foreign portfolio investors (FPIs). This is widely expected to bring Indian taxation rule at par with other emerging markets. If FPI participation improves, it will augment the country’s foreign exchange reserves, giving more room for the country’s apex bank to defend the rupee amid stress, debt market experts said. The move could also open the door for Indian G-Secs’ inclusion in the Bloomberg Global Bond Index, which may in-turn bring inflows of around $20-25 billion over the next year.
The Reserve Bank of India (RBI) will release the list of upper-layer non-banking financial companies (NBFCs) soon, Governor Sanjay Malhotra said at the post-policy press conference. "The list is there already. So, it continues till the time we have a new list. We will do it (update) shortly," Malhotra said without elaborating. Tata Sons, the holding company of the Tata group, has sought to de-register as an upper-layer NBFC, which would exempt it from the mandatory listing requirement, the deadline for which was September 2025. The regulator has not officially commented on this request. Responding to a specific question on Tata Sons' application to surrender its upper-layer NBFC classification in an interview with ET in March, Malhotra said the matter is under examination and that the process for finalising a revised list is underway.
Mutual fund (MF) houses are restricting large inflows into gold exchange traded funds (ETFs) and fund of funds (FoFs) feeding into such schemes in order to align with govt's recent policy of discouraging people from buying gold. Three large fund houses--HDFC MF, ICICI Prudential MF and Nippon India MF--have restricted large inflows into gold funds. The decisions will come into effect between June 5 and June 8. "In light of the broader economic and market conditions, it has been decided to temporarily restrict lumpsum subscriptions in HDFC Gold ETF and HDFC Gold ETF Fund of Fund until further notice," a communication from the fund house said.
Artificial intelligence has become the defining investment story of the past two years, lifting stock markets, creating trillion-dollar companies and driving unprecedented demand for advanced chips. However, billionaire investor Ray Dalio believes the excitement surrounding AI is also showing familiar signs of a market bubble. The founder of Bridgewater Associates said while speaking to Bloomberg Television on Wednesday that investors should be careful not to confuse belief in the technology with belief in the stocks tied to it. His warning comes at a time when AI-related companies are among the biggest winners on Wall Street, with investors pouring billions of dollars into chipmakers, data-centre operators and AI infrastructure firms. Every great technology creates a bubble, says Dalio Dalio claimed that history shows major technological breakthroughs often trigger periods of excessive optimism and speculation. “All great technology changes produce bubbles,” Dalio told Bloomberg TV. “Nobody can get it exactly right.”
India should stop “selling itself short” over near-term economic challenges as its long-term growth trajectory remains firmly intact, said Jane Fraser, Chair and Chief Executive Officer of Citi, on Thursday. “India’s got to stop selling itself short. There are some short-term headwinds, but the long-term India story is very much intact,” Fraser said at the Citi India Conference. Despite geopolitical tensions and trade-related uncertainties, she said India’s structural growth drivers remain strong. Fraser noted that Prime Minister Narendra Modi appeared committed to addressing bottlenecks and improving the ease of doing business, which would be critical for attracting greater foreign investment.
Japan's Nikkei share average retreated on Friday for a second consecutive session after closing at a record high earlier this week, as momentum slowed in the red-hot technology sector. The benchmark Nikkei 225 Index sank 1.3% to close at 66,588.12, eking out a 0.3% gain for the week. The broader Topix slid 0.07% to 3,949.09. The Nikkei closed at an all-time peak of 68,402.13 on Wednesday and has gained 34% so far this year. The tech-heavy Nasdaq closed lower in the U.S. overnight after chipmaker Broadcom missed revenue expectations, dampening euphoria over AI investment.
Banking and financial services companies foresee AI-assisted decision-making and real-time fraud prevention becoming common in the near future, as early adopters move beyond experimentation to operational deployment, according to the ET-Cisco AI Readiness & Adoption survey for the BFSI sector. Meanwhile, the broader BFSI industry’s enterprise readiness is under the spotlight, even as companies plan to scale up AI deployment. Before large-scale adoption, companies need to address key challenges around AI governance, infrastructure and data security. “The biggest barrier to moving from experimentation to production is not technology readiness, but enterprise readiness,” said Ashish Mittal, Chief Technology Officer at Tata AIG General Insurance. Implementation is often slowed by fragmented data, weak governance frameworks, integration challenges with legacy infrastructure. and difficulties in scaling pilots sustainably, Mittal said.
HDFC Mutual Fund has imposed temporary restrictions on investments in its gold exchange-traded fund (ETF) schemes amid heightened interest in gold-backed assets. The fund house said it will stop accepting subscription transactions from large investors directly into HDFC Gold ETF from June 8, 2026. The restriction will apply to investors making direct investments of at least Rs 25 crore with the mutual fund. In addition, lumpsum purchases and switch-ins into HDFC Gold ETF Fund of Fund (FOF) will be processed only up to Rs 10 lakh per PAN per calendar month at the first-holder level. The cap will apply to transactions received after the cut-off time of 3 pm on June 5. HDFC Mutual Fund said the measures are being introduced in light of prevailing economic and market conditions and will remain in force until further notice.
The Reserve Bank of India's move to increase the limits for investment in India's equity markets by non-resident Indians (NRIs), individual Persons Resident Outside India (PROIs) and overseas citizens of India (OCIs) with SEBI registration is not likely to move the needle on foreign flows. The limit for individual residents under OPI or overseas portfolio investment in listed securities was 10 percent, but this has been hiked to 24 percent. The Street is unanimous in its outlook: while the policy direction is largely positive, the measures will take time to significantly move the needle on foreign flows. Participation in the segment is likely to see a gradual increase, not a sudden jump.
IIFL Finance has raised $500 million by selling international dollar bonds to investors across the world in an issue which was priced on Wednesday. The 3.25 year issue was priced at 7.6% after building an order book of close to $2 billion from large institutional investors. This is the first dollar bond issued out of India since January, when ReNew Energy raised $600 million by issuing a five-year bond. Since then, geopolitical tensions, particularly stemming from the US-Israel attack on Iran, have led to high overseas yields which are beyond the expectations of Indian companies looking to raise funds from abroad. Nirmal Jain, founder and managing director at IIFL Finance, told ET the successful issue comes at a time of heightened volatilities, pressure on the rupee and capital outflows from India.
India's red-hot initial public offering market may look irresistible as foreign firms line up for listings, but the rush is not about raising funds to expand in a fast-growing market; it's about sending billions of dollars back to headquarters. Just one of six foreign-based companies that listed their Indian units in Mumbai since 2024 raised new funds, with all others structured purely as secondary offerings - or offer for sale (OFS), where existing shareholders sell their holdings to the public without raising any new funds, according to data from Prime Database, an Indian market research firm.
The RBI rejected all bids for 182-day and 364-day treasury bills while accepting only 91-day bills at auction on Wednesday, signalling its discomfort with rising short-term yields ahead of the monetary policy decision due Friday. The RBI sold 91-day treasury bills at a yield of 5.56%. The central bank typically rejects bids when it finds yields too high, and the move is seen as a signal that it wants interest rates to soften. The decision comes as the MPC began its meeting to decide on interest rates, with the outcome scheduled for Friday and expectations that rates will be held. Yields on govt bonds fell after the auction. This is the second instance in under three months where the RBI has cancelled treasury bill sales. Yields on one-year paper have risen by 40 basis points this fiscal due to the rupee coming under pressure.
Just as the microfinance sector appears to be emerging from a prolonged asset-quality stress cycle, a weaker monsoon forecast threatens to create fresh challenges. With the India Meteorological Department (IMD) downgrading its southwest monsoon forecast to “below normal” — potentially the weakest in 11 years — concerns are resurfacing for India’s over ₹3-lakh-crore microfinance industry. The IMD has revised its June-September southwest monsoon forecast to 90% of the long-period average, down from 92% projected earlier. It has also indicated that El Niño conditions are likely to develop during the season. A weaker-than-expected monsoon could hurt agricultural output, strain rural incomes and stoke inflation, prompting microfinance lenders to take a more cautious approach to fresh loan disbursements. “A weak monsoon could trigger a major supply shock and lift inflation. The MFI sector is likely to withstand the first level of shock as the current guardrails have already reduced its risk exposure.
The Indian central bank likely intervened in the foreign exchange market on Wednesday to limit the rupee's fall, four traders told Reuters, as a rise in crude prices on renewed U.S.-Iran hostilities pressured the South Asian currency. The rupee was at 95.47 per dollar, down 0.2% on the day. State-run banks were spotted offering dollars near the 95.50 mark, a trader at a Mumbai-based bank said. Renewed hostilities in the Middle East sparked the third consecutive daily rise in oil prices, with Brent crude rising about 1% to nearly $97 per barrel.
The Reserve Bank of India (RBI) on Tuesday announced a Rs 50,000 crore two-day Variable Rate Repo (VRR) auction, a move aimed at managing short-term liquidity conditions ahead of the central bank's monetary policy review. The auction will be conducted on June 3 between 9:30 am and 10 am, while the reversal of funds will take place on June 5. "On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo (VRR) auction on Wednesday, June 03, 2026," the RBI said in a release. The announcement comes as surplus liquidity in the banking system has moderated in recent days. System liquidity stood at a surplus of about Rs 85,411.44 crore as of June 1, compared with a surplus of Rs 1.40 lakh crore on May 31.
UPI transactions hit a record high in May 2026, with the National Payments Corporation of India (NPCI) reporting 23.2 billion transactions worth Rs 29.90 lakh crore, up 24 % and 19 % respectively on an annual basis, because of summer travel, IPL 2026, and seasonal consumer spending, as per PTI. The April figures stood at 22.35 billion transactions valued at Rs 29.03 lakh crore. Looking at the bigger picture, India processed over 200 billion UPI transactions in 2025-26. UPI handled 24.16 billion transactions during the year, up 30% from 18.59 billion the year before. The value of those transactions rose 20.6% to Rs 314.2 lakh crore. UPI now accounts for nearly 86% of all retail payment transactions in the country, according to the latest RBI report For context: three years ago, that share was closer to 80%. The big picture on digital payments Total cashless transactions across all payment systems grew 26.8% in volume during 2025-26. In value terms, all digital payments combined, from large corporate settlements via RTGS to small peer-to-peer UPI transfers, reached Rs 3,251 lakh crore during the year.
South Korea’s equity market has overtaken India’s as the world’s sixth largest, driven by a relentless surge in chip heavyweights powering the global artificial intelligence buildout. The total market capitalization of Korea-listed companies has soared 86% this year to $5 trillion, while India’s has declined to $4.8 trillion, data compiled by Bloomberg show. Samsung Electronics Co. and SK Hynix Inc., newly minted members of the $1 trillion valuation club, have powered Korea’s equity surge, lifting the Kospi’s 2026 gains to more than 100% through their dominance in AI memory chips. Korea has vaulted past Canada, Germany, the UK, and France this year. “Closing in on India is a remarkable milestone for a market that, not long ago, was setting Kospi 5,000 as an ambitious target,” said Ross McGarry, senior investment analyst at Asset Value Investors. “This year’s rally, though, has been heavily carried by the memory cycle — Samsung and SK Hynix have done the heavy lifting. The real test is whether Korea can sustain this re-rating through genuine corporate governance reform.”
Indian government bonds slid on Monday after oil prices jumped as fresh U.S.-Iran strikes threatened a fragile ceasefire and stoked rate-hike worries ahead of a crucial policy meeting. The Reserve Bank of India will announce its rate decision on Friday, with markets largely pricing in a pause even as Standard Chartered, Capital Economics, ANZ, MUFG and OCBC call for a 25-basis-point hike. "While the case for a tighter monetary policy is strengthening, the timing of the move is a matter of debate," Radhika Rao, senior economist and executive director at DBS Bank said in a note. "In our view, the monetary policy committee is likely to prioritise the key mandate, i.e. inflation, to decide on the path ahead, while relying on other instruments to stabilise the currency and bond markets." India's inflation pressure is building. The rise in wholesale prices accelerated to a three and a half-year high in April. State-run fuel retailers have raised fuel prices four times in May. A forecast for a weak monsoon also poses further inflation risks.
South Korea has overtaken India to become the world's sixth-largest equity market, according to data compiled by Bloomberg, as a rally in chipmakers tied to the global artificial intelligence buildout lifts Asian The combined value of South Korea-listed companies has climbed about 86 percent in 2026 to $5 trillion, led by Samsung Electronics and SK Hynix, while India's has fallen to $4.8 trillion, Bloomberg data showed. The gains are concentrated in chip stocks. Samsung and SK Hynix together account for nearly half of South Korea's market value and TSMC for almost 40 percent of Taiwan's, while Nvidia alone is now worth more than all listed Indian companies combined, Business Standard reported, citing Bloomberg data. TSMC's share of the global foundry market rose to almost 70 percent in 2025, up from 64.4 percent a year earlier, on booming Al demand, research firm TrendForce said, as reported by the Taipei Times.
At first glance, the numbers appear contradictory. More investors are stopping their mutual fund SIPs than starting new ones, yet monthly SIP inflows are touching record highs. In March 2026, the SIP stoppage ratio crossed 100%, meaning the number of SIP accounts discontinued or completed exceeded fresh registrations, for the first time in recent memory. But in the same month, SIP inflows hit an all-time high of Rs 32,087 crore. The trend continued in April. Inflows remained above Rs 31,000 crore even as the stoppage ratio stayed above 100%. The data raises an obvious question: if more SIPs are being closed than opened, who is driving these record numbers? The answer lies in the changing nature of India’s retail investing landscape and in some important nuances that headline figures tend to obscure.
The first signs of foreign portfolio investors (FPI) returning to Indian markets may already be emerging. On May 18, 2026, FPIs were net buyers of Rs 2,813.69 crore in the equity cash market after US President Donald Trump paused fresh strikes on Iran and crude prices eased sharply. While one session does not make a trend, it highlights how quickly market sentiment can shift when key global triggers reverse. But as the saying goes, we cannot miss the forest for the trees. Foreign portfolio investors have pulled out over Rs 2.1 lakh crore from Indian equities in barely four months, a scale of selling described as the worst since foreign portfolio investing in India was permitted in 1993. And with May barely half done, the exodus shows no signs of stopping. To put it in context: this is not a bad year for FPI flows. This is historically bad. The total outflows in 2026 have already surpassed the Rs 1.66 lakh crore pulled out during the entirety of 2025, according to data with NSDL.
India's foreign exchange reserves fell by $7.5 billion to $681.3 billion in the week ended May 22, as the RBI intervened to protect the rupee from depreciating past the 97 per dollar mark. The rupee fell to a record low of 96.96 on May 20. The fall in reserves also comes amid revaluation in gold reserves. Gold reserves fell by $4.5 billion to $114.7 billion, while foreign currency assets decreased by $2.8 billion to $543 billion in the week. The Special Drawing Rights (SDRs) were down by $77 million to $18.748 billion, the apex bank said.
The finance ministry on Friday launched a single unified online platform for citizens to search and trace unclaimed bank deposits, insurance claims, shares and mutual funds across the financial ecosystem. The initiative is expected to enhance public awareness, improve ease of access to information and contribute to the vision of Viksit Bharat 2047 through greater financial empowerment, inclusion and trust in the financial system, the finance ministry said in a statement. The portal has been launched in collaboration with PSB Alliance to facilitate easier access to information relating to unclaimed financial assets.
The value of retail central bank digital currency (CBDC) in circulation declined by 24.08 per cent in 2025-26, despite the continuous pilot use cases for the currency by the Reserve Bank of India (RBI). According to the RBI's annual report, the value of bank notes in circulation in digital form through 'e₹-Retail (e₹-R)' stood at Rs 771.66 crore at the end of March 2026, compared with Rs 1,016.46 crore as on March 31, 2025. Meanwhile, the value of bank notes in circulation in digital form through 'e₹-Wholesale (e₹-W)' stood at nil as on March 31, 2026, unchanged from a year ago.
The Iran war rocked global bond markets again in May, sending yields to multi-decade highs as traders priced in central bank rate hikes - only for signs of progress in peace talks and weak economic data to bring them sharply lower again. Although a clear end to the conflict would bring immediate relief and lower government borrowing costs around the world, May's moves underscore how investors are twitchy about inflation and growing public debts. TREASURY TANTRUM The 30-year U.S. Treasury yield soared to around 5.2% on May 20, its highest since 2007, as the Iran war roiled the $28 trillion U.S. government bond market.
