NSE publishes a monthly report called Market Pulse, a detailed look at what’s happening in Indian markets and the economy. They cover stock market performance, inflation, government spending, corporate earnings, and more.
This month, we’re summarising it here. The plan is to have this up each month going forward. This one covers April 2026.
NSE wrapped up FY26 as the largest derivatives exchange and deepened its reach across India. The investor base kept growing through the year despite market volatility.
- 12.9 crore unique registered investors on NSE as of March 31, 2026.
- 99.85% of India’s pin codes now have at least one NSE investor.
- Market cap of NSE-listed companies: US$ 4.4 trillion.
- Total passive AUM tracking Nifty indices: US$ 101.1 billion.
- Domestic market share: 93% in equity cash, 99.8% in equity futures, 74.7% in equity options (by premium), 100% in forex derivatives.
- Rs. 20 lakh crore raised through equity and debt in FY26 across 2,942 listed companies.
- 108 mainboard IPOs and 111 SME IPOs during the year.
Key Macro Charts
For most of FY26, the economy held up well. March is where the numbers started moving in the wrong direction.
- GDP grew 7.6% in FY26.
- Inflation stayed low for most of the year, averaging 2.1%, but rose to 3.4% in March.
- Wholesale prices rose faster, hitting 3.9% in March, driven mainly by rising energy costs.
- Forex reserves stood at US$ 688 billion at the end of March, enough to cover about 10.7 months of imports.
- The rupee fell 9.9% over FY26, ending at its weakest level ever against the dollar.
- The fiscal deficit was at 80.4% of the year’s target through February, which is normal for this time of year.
Indian markets underperformed significantly in FY26 compared to global peers. The gap between domestic and foreign investor behaviour was the defining story of the year.
- Nifty 50 ended FY26 down 5.1%, and down 14.4% in US dollar terms.
- MSCI World returned 17.4% for FY26, MSCI EM returned 26.9%.
- FPIs sold a record Rs. 2,28,970 crore in Indian equities in FY26.
- DIIs bought a record Rs. 8,49,758 crore, absorbing most of the FPI selling.
- Individual investors turned net sellers in FY26, a reversal from prior years.
- 10-year G-sec yield remained elevated through the year, with the long end under pressure.
FY26 in Summary
This is the fiscal edition, so the report covers the full year FY26 along with the latest monthly numbers.
- Markets were steady for most of FY26.
- In late February, the Iran-Israel-US conflict started and oil crossed US$ 100.
- The Strait of Hormuz, a key oil shipping route in West Asia, was disrupted.
- Nifty fell 11.3% in March, its worst month since March 2020.
- Oil ended the year up 58%, the rupee fell to a record low of 89.9 against the dollar.
- Domestic investors kept buying through the year, foreign investors were the ones selling.
Market Concentration across the US, China, Japan, and India
This month’s research section looks at how the structure of stock markets across the US, China, Japan, and India has shifted between 1995 and 2025. It is a useful long-term lens, especially for understanding where India’s market stands today.
The overall theme is that technology now dominates the US market, financials lead India, and markets globally are stepping away from commodities and real estate.
United States
- IT now makes up 31% of the US stock market, up from 16% in 1995.
- Consumer Staples and Industrials have seen their share fall over the years.
- A small number of large companies now account for most of the market’s value.
China
- Real estate dominated in 1995 at 34% of the market cap. Now, it is just 2%.
- Technology and financials have grown to fill that space, each at around 18%.
- The market is now more evenly spread across companies than it was before.
Japan
- Relatively stable over 30 years. Industrials still lead at 24%
- IT has grown modestly from 9% to 13%.
India
- Materials and Energy led India’s market in 1995. Financials are now the largest sector at 25% in 2025.
- IT grew from almost nothing in 1995 to a peak, and now sits at around 8% of the total market cap in 2025.
- India’s market has become more broad-based over time, with value spread across more companies and sectors.
This is measured using the HHI score, a way to track how concentrated market value is among a few companies. India’s score dropped from 202 in 1995 to 81 in 2025. The US moved in the opposite direction, with its HHI rising from 119 to 164 in the same period
More companies across more sectors are driving India’s market today compared to 30 years ago. In the US, it is the opposite, with a few large tech companies accounting for most of the market’s value.
Macroeconomy
India’s economy held up well through most of FY26, supported by strong domestic fundamentals. The external situation became more challenging towards the end of the year.
FY26 in review
- Real GDP grew 7.6% in FY26, up from 7.1% in FY25.
- Private consumption was the main driver of growth. Investment also picked up during the year.
- Inflation averaged 2.1% for the full year, and the RBI cut rates twice during this period.
- The RBI pumped in about Rs. 13.8 lakh crore into the banking system through various measures, including rate cuts, liquidity operations, and forex swaps.
- The rupee fell 9.9%, the merchandise trade deficit hit a record US$ 334 billion, and bank credit grew faster than deposits through the year.
RBI kept rates unchanged in April
The RBI’s first policy meeting of FY27 ended with no change. Repo rate stays at 5.25% with a neutral stance, marking the third consecutive pause.
- The West Asia conflict is seen as a supply-side shock that could push up inflation, disrupt trade, and tighten financial conditions.
- GDP growth for FY27 is projected at 6.9%, with risks on the downside if the conflict continues.
- Inflation for FY27 is projected at 4.6%, with the second half of the year expected to see higher readings.
- A below-normal monsoon forecast of 92% adds further uncertainty, particularly for food prices.
- The RBI has flagged that it could consider a rate hike if conditions worsen.
- Banking system liquidity was in surplus, averaging Rs. 1.6 lakh crore in Q4FY26.
Industrial activity
Industrial activity was healthy in February but started showing some pressure in March.
- IIP, which tracks monthly output across factories, mines, and utilities, grew 5.2% in February. Manufacturing came in at 6% and capital goods at 12.5%, a nine-month high.
- Manufacturing PMI fell to 53.9 in March, a 55-month low, though still above 50, which indicates expansion. PMI is a monthly survey of purchasing managers that signals whether business activity is growing or contracting.
- Services PMI eased slightly to 57.5 in March. A reading above 50 means the services sector is still growing, and 57.5 is still a strong number despite the slight dip.
- Core sector growth came in at 2.3% in February.
Inflation
Inflation stayed low for most of FY26, but March showed the first signs of oil prices feeding into broader costs.
- CPI, which tracks the prices consumers pay for everyday goods and services, rose to 3.4% in March from 3.2% in February.
- Core inflation, which excludes food and fuel to give a cleaner read on underlying price pressures, stayed contained at 3.3%
- WPI, which tracks prices at the wholesale or factory level before goods reach consumers, jumped to 3.9% in March, a 38-month high, driven mainly by crude oil prices.
- For the full year FY26, CPI averaged 2.1%, one of the lowest in recent years.
- Urban inflation has been running higher than rural inflation since March 2025.
Fiscal
Government finances stayed on track through FY26, with the quality of spending also improving.
- The fiscal deficit, which is the gap between what the government earns and spends, came in at 80.4% of the full year target through April-February, which is normal for this point in the year.
- Capital expenditure, which is spending on infrastructure and long-term assets, grew 14.5% in April-February, better than last year’s pace.
- GST collections averaged Rs. 1.9 lakh crore per month in FY26, staying resilient through the year.
- The FY27 fiscal deficit is budgeted at 4.3% of GDP, continuing the government’s path of gradual fiscal consolidation.
Bank credit
Credit growth stayed strong through FY26, but banks are lending more than they are collecting in deposits.
- Bank credit grew 13.8% as of mid-March, while deposits grew at a slower 10.8%.
- The credit-to-deposit ratio, which shows how much of every rupee deposited is being lent out, hit an all-time high of 83%. To bridge this gap, banks are increasingly borrowing from short-term market instruments.
- Loans against gold jewellery grew 124% year on year, a significant shift in how people are borrowing.
- Personal and vehicle loans stayed strong; credit card and education loans slowed down.
Global environment
The global outlook for FY27 is more uncertain than how FY26 began. Trade tensions were already a concern and the conflict has added to that.
- The IMF cut its global growth forecast for 2026 to 3.1%, below the long-term average of 3.7%.
- Global inflation is expected to rise to 4.4% in 2026 before easing.
- India’s growth forecast from the IMF is 6.5% for both 2026 and 2027.
- Measures tracking geopolitical risk, US trade policy uncertainty, and broader global uncertainty all remain at elevated levels.
The Economic Cost of War
This section covers academic research on what wars do to economies. The timing is relevant given the current conflict.
The research shows that wars cause severe but often temporary damage to countries directly involved, while also hurting nearby countries through disrupted trade and rising costs.
- Countries that lose wars tend to bounce back to where they were headed before the conflict, usually within 15 to 20 years. Researchers call this the phoenix factor.
- When two countries go to war, trade between them can fall by 80 to 90%, and it can take a decade to recover even after the fighting stops.
- If a country at war is large enough, say 5% of global GDP, the countries around it can see their own output drop by 5% and inflation rise by 8 percentage points.
- Wars slow down research and innovation, and industries that depend heavily on technology often never fully catch up
- All conflicts between 1970 and 2014 are estimated to have cost the world US$ 9.7 trillion in lost output, which is 12% of what global GDP was in 2014
