India Macro Daily(Beta Mode)
IP Misses, Markets Slide
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| Nifty 50 | 24,480.50 | -1.55% |
| Sensex | 79,116.19 | -1.40% |
| USD/INR | 92.07 | +0.07% |
| EUR/INR | 107.24 | +0.44% |
| Reliance | 1,311.10 | -3.45% |
| HDFC Bank | 868.80 | -1.21% |
| Brent Crude | 83.37 | +2.42% |
| Gold | 5,188.60 | +1.59% |
| Bitcoin | 72,981.50 | +6.86% |
| India Short-term Rate | 5.50% | +0.00% |
| India Long-term Rate | - | - |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| Industrial Production Year-over-Year | 8 | 6.50 | 4.80 |
| Manufacturing Production Year-over-Year | 8.40 | - | 4.80 |
| Current Account Balance | -14,100m | - | -13,200m |
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| No events available | |||
- Industrial production slowed sharply to 4.8% YoY, missing consensus of 6.5% and down from 8% prior, signaling weakening momentum in manufacturing.
- Current account deficit narrowed to -$13.2 billion from -$14.1 billion, offering some relief amid rupee pressures.
- Equities tumbled with Nifty 50 down 1.55% to 24,480.50 and Sensex off 1.40% to 79,116.19, hit by geopolitical risks and oil volatility.
Yesterday's Recap
India's industrial production disappointed with a year-over-year growth of 4.8%, well below the consensus estimate of 6.5% and the previous 8%, reflecting supply chain disruptions and softer export demand. Manufacturing production also cooled to 4.8% YoY from 8.4% prior, pressuring sectors like autos and textiles amid rising input costs. The current account balance improved slightly to -$13.2 billion from -$14.1 billion, supported by resilient services exports despite widening trade gaps.
Equity markets reacted negatively, with the Nifty 50 dropping 1.55% to close at 24,480.50, driven by sell-offs in heavyweights like Reliance Industries, which fell 3.45% to 1,311.10. The Sensex declined 1.40% to 79,116.19, while HDFC Bank slipped 1.21% to 868.80 amid broader banking sector concerns. The rupee edged weaker with USD/INR up 0.07% to 92.07, and EUR/INR rising 0.44% to 107.24, influenced by dollar strength.
Brent crude surged 2.42% to 83.37, adding to inflationary worries, while gold climbed 1.59% to 5,188.60 as a safe haven.
The Day Ahead
With no major domestic data releases scheduled for today, attention turns to ongoing geopolitical developments in the Middle East that could influence oil prices and rupee stability. Markets may digest yesterday's weak industrial figures, potentially weighing on manufacturing-linked stocks in early trading. Tomorrow's calendar is also empty, leaving room for global cues like US economic indicators to drive sentiment.
Investors should monitor FII flows, which remained positive last week at Rs 6,062 crore net buys despite volatility. Broader focus includes any RBI liquidity operations to manage short-term rates around 5.50%. Overall, a quiet day could see consolidation in equities unless external shocks from Iran tensions escalate.
Other Economic Notes
India's growth trajectory faces headwinds from softening industrial output, but resilient services and IT exports provide a buffer. Broader themes include elevated valuations in equities, as highlighted by DSP Mutual Fund's CEO, urging caution amid macro resilience. External borrowing via ECBs rose to $4.435 billion in December 2025, signaling confidence in rupee dynamics despite geopolitical risks.
