Altifi Weekly Bulletin- 5th September 2025
Economy and regulatory updates
- The Centre’s fiscal deficit for the first four months of fiscal 2026 widened to 29.9% of the budget estimates (BE) or Rs 4.7 trillion vs 17.2% of the BE or Rs 2.8 trillion for April-July fiscal 2025, according to government data.
- The HSBC India Manufacturing PMI rose to 59.3 in August 2025 from 59.1 in July 2025, the Services PMI climbed to 62.5 from 60.5 and the Composite PMI edged up to 63.2 from 61.1.
- Data from the Reserve Bank of India (RBI) showed that the current account deficit stood at $2.4 billion, or 0.2% of GDP, in the first quarter of fiscal 2026, compared with a surplus of $13.5 billion, or 1.3% of GDP, in the preceding quarter.
- The GST collection in August rose 6.5% on-year to Rs 1.86 trillion due to an increase in domestic sales.
- Crisil has maintained India’s GDP forecast for fiscal 2026 at 6.5%, even as it sees downside risks emerging from the US tariffs.
- The Goods and Services Tax (GST) Council approved a major overhaul of the indirect tax regime, replacing the four-tier structure of 5%, 12%, 18% and 28% with a simplified two-rate system of 5% and 18%, and introducing a special 40% slab for select items, with effect from September 22, 2025.
- Essential food items will be tax free and various everyday food products and drinks will be taxed at 5% instead of 18%.
- Individual life and health insurance policies will become tax free.
- The government has formed a committee to address tax and export clearance issues faced by manufacturing units, amid the high tariffs imposed by the US.
- The finance ministry has issued a notification paving the way for quick implementation of 100% foreign investment in the insurance sector, once the notification receives parliament approval.
- Reserve Bank of India Deputy Governor M Rajeshwar Rao emphasised that banking services, including digital platforms, are designed for public convenience and must be used responsibly.
- The Securities and Exchange Board of India (SEBI) has rolled out a comprehensive framework to monitor intraday positions in equity index derivatives in an effort to curb the risks posed by oversized exposures while preserving liquidity and orderly functioning of the market.
Domestic macroeconomic indicators
Indian debt market update
- The interbank call money rate closed at 5% in the week ended September 5 from 5.45% in the holiday-shortened week ended August 29.
- Government bond prices were up in the week ended September 5. The yield of the 10-year benchmark 6.33% 2035 paper closed at 6.47% on September 5 against 6.59% on August 29.
- Bond prices rose amid hopes that the RBI may ease debt oversupply woes by reducing auction size in the second half of fiscal 2026. It rose after the GST revenue loss was estimated to be much lower than feared, easing fiscal concerns.
- In the weekly debt sale held on September 5, the RBI auctioned 6.28% GS (Government Security) 2032 and 7.09% GS 2074 for an notified amount of Rs 25,000 crore.
Indian debt market indicators
India yield curve shift (%) (W-o-W)*
Indian equity market updates
- Indian equity closed higher this week, lifted by upbeat GDP data for the first quarter and optimism around GST reforms. However, there were some losses due to profit booking and foreign fund outflows. The BSE Sensex and the Nifty 50 rose 1.13% and 1.29%, respectively.
- Almost all the sectors closed higher, with metals, autos and consumer durables (CD) gaining the most. The BSE Metal, BSE Auto and BSE CD rose 5.84%, 5.22% and 2.90%, respectively.
- The domestic market bought Rs 11,601 crores worth of equities till September 4, 2025, compared with Rs 93,517 crores worth of equities till August 29, 2025.
- Foreign institutional investors sold equities worth Rs 4,585 cr till September 4, 2025, compared with selling of Rs 56,586 crores till August 29, 2025.
Indian equity Indices
Global Equity market summary
- US stocks closed higher this week as investors assessed the latest labour market data and focused on the non-farm payroll numbers that are expected to be released on Friday. Fed rate cut hopes led to further gains.
- However, there were some losses due to a sell-off in technology stocks and after a court ruled against the US President’s tariffs, which clouded the trade outlook.
- Britain’s FTSE index ended higher this week, boosted by banking and healthcare stocks.
- However, financial stocks fell amid reports that the government may impose a windfall tax on banks.
- Asian equities had a mixed performance this week. Japan’s Nikkei index ended higher during this week on hopes of Fed rate cut this month.
- However, there were some losses due to a decline in technology stocks after dismal earnings of major tech companies raised concerns about demand for data centre equipment.
- Hong Kong’s Hang Seng Index ended higher during this week as major companies reported upbeat earnings and on optimism over Fed rate cut. However, profit booking at higher levels caused some losses.
- China’s Shanghai Composite Index closed lower during this week due to sell-off in technology shares.
- Investors locked in profits following a sharp rally in AI-related stocks.
- Markets also fell due to media reports of potential regulatory measures to curb speculation and conclusion of a politically significant military parade in Beijing.
Global equity benchmark indices’ returns
Global Yield
- US Treasury prices were higher during the week due to dismal jobs data.
- Bond prices rose after the US Labor Department’s closely watched Job Openings and Labor Turnover Survey showed that job openings in the country fell 176,000 to 7.18 million in July 2025 from 7.36 million in June 2025. Prices rose further after ADP employment data showed that the US added 54,000 jobs in August 2025, following an upwardly revised 106,000 in July.
- However, the prices fell earlier in the week after a US court ruled that most tariffs imposed by the Donald Trump administration were illegal, triggering concerns that the government may have to refund billions of dollars that have already been collected as trade duties.
- The yield on the 10-year benchmark Treasury bond closed at 4.17% on September 4 vs 4.23% on August 29.
Major global bond yields
Commodities and Currency
- Crude oil prices fell amid oversupply woes due to the plans of the OPEC+ alliance to decide on an output hike during its upcoming meeting.
- Gold prices closed higher this week as rising hopes of a rate cut by the US Federal Reserve (Fed) boosted demand for safe-haven investments.
- The rupee closed lower against the US dollar this week, dragged down by persistent foreign fund outflows, a stronger dollar index and renewed fears of fresh tariffs from the US. However, stronger domestic data brought in some gains.
Commodity Prices
Other currencies vs the rupee
Global Economic
- US S&P Global Manufacturing PMI increased to 53 in August compared to 49.80 in July. US S&P Global Services PMI fell to 54.5 in August of 2025 from the year-to-date-high of 55.7 in the previous month while composite revised down to 54.6 from 55.1.
- US nonfarm payrolls rose by 22,000 in August 2025, compared to an upwardly revised 79,000 in July 2025.
- The US trade gap widened sharply to $78.3 billion in July 2025, the highest in four months, compared to a revised $59.1 billion gap in June.
- Eurozone HCOB Services PMI fell to 50.5 in August 2025, compared to 51.0 in July 2025 while the HCOB Composite PMI inched higher to 51 from 50.9.
- Eurozone Producer Prices rose 0.2% year-over-year in July 2025, compared to a 0.6% increase in June 2025.
- Eurozone annual inflation rate rose to 2.1% in August 2025, compared to 2.0% in July 2025 while the annual core inflation rate unchanged at 2.3% for the fourth consecutive time in August 2025.
- UK S&P Global Manufacturing PMI fell to 47 in August 2025 compared to 48 in July 2025.
- China Caixin Manufacturing PMI rose to 50.5 in August compared to 49.5 in July.
- Japan S&;P Global Manufacturing PMI rose to 49.7 in August 2025 compared to 48.9 in July 2025.
Macro indicators
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