NEW DELHI– India’s equity markets gained momentum this week as robust economic data signaled renewed investor confidence, according to a report by ICRA Analytics. The nation’s GDP expanded by 7.8 percent year-on-year in the first quarter of FY26, marking the fastest growth in five quarters.
The report attributed the market’s upbeat tone to strong macroeconomic indicators, including a surge in the Services Purchasing Managers’ Index (PMI), which climbed to 62.9 in August 2025 — its highest level in over 15 years — driven by new orders and resilient demand.
Investor sentiment was further lifted by the Goods and Services Tax (GST) Council’s decision to simplify the current four-tier structure (5, 12, 18, and 28 percent) into two primary rates of 5 percent and 18 percent, with a special 40 percent slab proposed for luxury items such as premium cars, tobacco, and cigarettes.
Markets also drew strength from the U.S. Federal Reserve’s first interest rate cut of the year in September, which followed signs of labor market softness. However, gains were partially offset by ongoing uncertainty surrounding India–U.S. trade talks and continued foreign institutional investor outflows.
The report also highlighted key trends in mutual fund performance as of September. In the equity segment, all fund categories posted positive average returns over 3-, 5-, and 10-year periods. Small-cap funds delivered the strongest gains over five- and ten-year horizons, while large-cap funds recorded an average decline of about 4.9 percent over the past year.
In the debt mutual fund category, credit risk funds generated the highest average returns over 6-month, 1-year, 3-year, and 5-year periods. Low-duration funds led short-term performance, delivering an average one-month return of 18.57 percent. Across all major timeframes, debt funds posted positive returns, underscoring steady investor confidence in fixed-income instruments. (Source: IANS)
