Week ending 10th January 2026

# 1 Markets

1.1 India’s benchmark indices fell for a fifth consecutive session on Friday, posting weekly losses of 2.5%—the steepest since September—as investors turned cautious ahead of U.S. jobs data and a Supreme Court ruling on punitive tariffs. The Nifty closed at 25,683, while the Sensex ended at 83,576. The sell-off followed record highs hit on Monday, driven by sustained foreign outflows and concerns over Donald Trump’s backing of a bill proposing 500% tariffs on imports from countries such as India and China that buy Russian oil. With no near-term positive triggers, the bearish trend is likely to persist in the coming weeks.

1.2 Indian government bond yields edged higher last week amid heavy supply concerns and tepid demand, with the 10-year G-Sec yield steady around 6.63% on January 9, 2026.

1.3 US equity markets ended last week, on a strong note, with major indices hitting record highs on Friday amid resilient economic data and tech sector gains. The S&P 500 rose 1.57% to close at 6,966.28, the Dow Jones gained about 1% to 49,462, and the Nasdaq surged 0.8% to around 23,547.

1.4 US Treasury yields declined modestly last week, with the 10-year note falling from around 4.17% to 4.175% by January 9, 2026, amid softer labour data and Fed rate cut expectations. The 5-year yield eased from 3.74% early in the week to close near 3.72%

# 2 Banking

2.1 RBI last Monday issued final guidelines on lending to related parties —Introduced a harmonised, principle-based framework for related-party lending. Key changes:

• Equity investments in related parties excluded; debt investments remain covered.
  • Certain NBFCs exempt, including those not accessing public funds and core investment companies.
  • Related-party loans fully secured by G-secs, FDs or life insurance policies (LTV ≤ 100% of realisable value) do not require board approval.
• ‘Senior officer’ replaced with ‘specified employee’ (up to two levels below the board).

• ‘Related party’ scope narrowed by removing duplicative references to relatives.
• ₹5 crore shareholding threshold removed.

• RBI has adopted a scale-based framework with higher limits for larger regulated entities.

• Tier-4 UCBs allowed limited related-party lending with board approval.
• For AIFIs, existing prohibitions on lending to directors and their interested entities continue unchanged.

 

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Overall, the RBI has balanced tighter governance with pragmatic relief, reducing disruption while sharpening clarity and proportionality in related-party lending rules.

2.2 As per data released by RBI last week

• 97.6% of bank accounts and 41.5% of deposits by value were insured by DICGC as of March 2025.
  • DICGC covers deposits up to ₹5 lakh per depositor.
• Of total bank deposits of ₹241.08 lakh crore, ₹100.12 lakh crore was insured in FY25.
• Insured deposits declined in share from 43.1% (₹94.12 lakh crore) in FY24 but rose 6.4% in absolute terms.
• DICGC settled ₹476 crore of claims in FY25 and recovered ₹1,309 crore.

High account-level coverage underscores depositor safety, but the relatively low value coverage highlights concentration of large deposits beyond the insurance net

# 3 SEBI

3.1 SEBI last Friday simplified Accredited Investor Framework introduced on August 3, 2021, and further simplified on December 18, 2023. Key highlights of proposed changes

• Investment managers may execute contribution agreements and initiate operational steps based on their assessment of investor eligibility, pending receipt of the accreditation certificate.
• Investor commitments cannot be included in scheme corpus until the accreditation certificate is obtained.
• AIF schemes may receive funds only after the investor obtains the accreditation certificate from an authorised agency.

• Requirement to submit a detailed net-worth calculation as an annexure to the net-worth certificate has been dispensed with.
  • It is optional for the CA to specify the actual net-worth amount, provided certification confirms that the prescribed threshold is met. A modified Annexure A has been issued to reflect these changes.

Overall, the changes streamline the accredited investor process by easing documentation, allowing early execution, and preserving prudential safeguards while maintaining regulatory discipline.

3.2 Sebi last Friday proposed overhaul of trading framework for exchanges – key highlights

• Merge all trading-related rules across equity and commodity segments to simplify compliance and eliminate duplication.
• Combine provisions on price bands, circuit breakers, bulk/block deals, call auctions, liquidity enhancement schemes (LES), margin trading facility (MTF), UCC–PAN norms, trading hours and daily price limits into one framework.
• Clearing corporation specific provisions to be shifted to a separate master circular to avoid regulatory overlap.
• Enhanced transparency by merging bulk and block deal disclosures and disclosure dissemination to PAN level reducing manual broker reporting.
• Margin Trading Facility rationalisation: Raise minimum broker net-worth requirement from ₹3 crore to ₹5 crore or higher (as specified by exchanges); Remove redundant due-diligence clauses.
• Introduce a principle-based Liquidity Enhancement Schemes [LES] uniformly covering equities, derivatives and commodities. Grant exchanges greater flexibility on scheme design, incentives and higher caps for new exchanges/segments.
• Scrap negotiated-deal exemptions, dedicated debt segment guidelines, forward contracts in commodities, MOU-based trading and unnecessary reporting norms.

SEBI’s proposed uniform set of trading-related disclosure requirements across India’s three stock and two commodity exchanges would help standardise compliance.  Exchanges launching new segments may offer incentives up to 25% of net worth for the first five years, and up to 25% of segment profits thereafter—a move that could aid NCDEX’s planned equity foray.

Overall, the proposals aim to deepen market liquidity while tightening governance and ensuring a level, non-manipulative playing field across exchanges.

# 4 Economy

4.1 As per Advance Estimates by Govt. released last week

• Real GDP growth estimated at 7.4% in FY26, up from 6.5% in FY25, despite global headwinds and steep US tariffs. Economy expected to cross the $4-trillion mark in FY26.
• Nominal GDP (estimated at ₹357.1 trillion in FY26), growth pegged at 8%, sharply lower than 10.1% assumed in the Budget and the weakest since the pandemic (excluding FY21).
  • Lower nominal growth reflects benign inflation but may strain tax buoyancy and fiscal math.
• Sectoral performance
  • Services: 9.1% growth (vs 7.2% in FY25).
  • Manufacturing: 7% (up from 4.5%), resilient despite tariff uncertainty.
  • Construction: 7% (slower than 9.4% last year).
  • Agriculture: 3.1% (down from 4.6%) due to price pressures from strong output.
• Demand drivers
  • Household consumption: 7% growth (slightly slower than FY25).
  • Investment (GFCF): Strong 7.8% growth, a key positive.
  • Government consumption: Accelerated to 5.2% (vs 2.3% in FY25).
• External sector
  • Exports: +6.4%.
  • Imports: +14.4%, outpacing exports and reflecting strong domestic demand.

 

India’s growth momentum remains robust and investment-led, but soft nominal GDP growth is the key macro risk, with implications for fiscal arithmetic even as real activity stays strong.Top of Form

4.2 As per World Economic Situation and Prospects 2026 report by the United Nations’ department of economic and social affairs released last week

• India’s GDP growth estimated at 7.4% in calendar year 2025 and 6.6% in 2026 (up from 6.4% earlier estimates). FY 26 projected around 7.2-7.4% and FY 27 projected at 6.6%.
  • India expected to remain among the fastest-growing major economies globally- driven by

• Resilient private consumption, strong public investment Tax reforms, GST rationalisation, income tax cuts, and monetary easing

• • Strong growth in manufacturing and services, alongside robust investment and consumption.
• Higher US tariffs may affect select product categories, but core export segments largely insulated.
  • US accounts for ~18% of India’s exports; impact cushioned by strong demand from Europe and West Asia.
• Inflation forecast at 4.1% in 2026 (vs 2.3% average in Jan–Nov 2025).
• Strong growth in gross fixed capital formation, led by public spending on infrastructure, defence, digital projects, and renewable energy. India has strengthened its role in global electronics supply chains.

Despite global trade and policy uncertainties, India’s growth outlook remains robust, anchored by strong domestic demand, public investment, and supportive policy measures that offset external headwinds.

4.3 As per S&P – HSBC release on India PMI – December 2025:

• Services PMI fell to an 11-month low of 58.0 in December from 59.8 in November (HSBC India Services Business Activity Index); still firmly in expansion (>50).

• • Services PMI averaged 59.4 in 2025 (vs 60 in 2024), underscoring a strong year overall.

• Manufacturing PMI declined to a two-year low of 55.0 from 56.6, reflecting weaker new orders and output, but remained in expansion.
• Composite PMI dropped to an 11-month low of 57.8 in December from 59.7 in November, indicating moderation across sectors.
  • Growth in new orders moderated due to competition from cheaper service providers, though buoyant demand and competitive pricing still supported activity.
  • Export orders strengthened in December, driven by demand from Asia, North America, West Asia, and the UK, rupee weakness likely aided competitiveness.
• Firms remain optimistic for 2026, but business confidence has weakened for the third consecutive month to a ~3.5-year low, due to market uncertainty and exchange-rate concerns.

December’s PMI dip signals a healthy cooling, not a slowdown—growth remains strong, but translating momentum into earnings will be critical in 2026.

4.4 As per Global SWF data released last week

• State-owned investor (SOI) investments in India plunged over 70% YoY in 2025 to $5.7 bn, from $20.1 bn in 2024—among the steepest annual declines.
• India’s share of SOIs’ global investments dropped to ~2% in 2025, from 9.5% in 2024 and 7.6% in 2023.
• Investments by Gulf-based SOIs fell to $1.38 bn in 2025 from $4.32 bn in 2024 (~one-third of prior year).
• Despite India’s slump, global SOI investments rose 32% in 2025 to $278 bn, with ~50% ($132 bn) flowing into the US.
• India is courting sovereign capital via GIFT City, InvITs, and PLI schemes, but investors stress the need for actionable deals and strong local partners (e.g., NIIF model).

Despite strong long-term potential, India lost near-term sovereign capital in 2025 as global investors pivoted to developed markets—underscoring the need to convert policy intent into investable, partner-led opportunities.

# 5 PE/VC

5.1 As per Venture Intelligence report released last week

• India-focused VC funds raised $2.5 bn in 2025 (20 funds), up from $1.6 bn in 2024 (16) and $1.9 bn in 2023 (19).
  • Final closes only marginally higher, but broader re-entry signals expectations of deal revival.
• Funds in/launching market sought ~$9 bn in 2025, but only ~$2.5 bn closed so far.
  • Domestic family offices becoming key LPs for early-stage funds; longer holds, higher return focus.
• Uninvested capital estimated at ~$100 bn, though deployments likely flat/muted in 2026.
• PE/VC investments $5.3 bn in Oct 2025 (+9% YoY), but deal count down 9% YoY to 102 and 30% MoM.
• Rising VC-backed IPOs (1–2/week) improving liquidity and confidence; more active 2026 expected, incl. growth/late stage.

Despite abundant dry powder and rising IPO-led confidence, India’s VC ecosystem is likely to see a measured, early-stage–led revival rather than a broad-based surge in 2026.

5.2 As per report published by Ken on Indian AIFs on 9^th Jan 2026:

• AIFs surged from ~160 funds with ₹28,000 crore (2015) to 1,740+ funds with ~₹15 lakh crore commitments by Jan 2026 (≈49% CAGR; 2.5× funds and ~4× capital since 2020).
• Over 50% of AIFs and around one-third of total commitments; focused on private equity, private credit, real estate and venture debt; typically target 20–25% returns.
• About two-thirds of AIF capital comes from domestic investors, mainly family offices; minimum ticket size remains ₹1 crore.
• VC (Cat-I) delivered highest extended IRR (22.9% as of Sep 2024); Cat-II equity ~17–18%; however, many gains remain unrealised (“paper returns”) as public markets caught up in late 2024.
• High fees, slower exits and loss of preferential terms post-SEBI’s early-2025 rules are pushing family offices toward direct deals and co-investments.
• Foreign outflows have increased reliance on a finite pool of wealthy domestic investors, sharpening competition among funds.
• Category-I & II enjoy pass-through taxation (12.5% LTCG / 20% STCG), while Category-III investors face business-level taxation of up to ~40%.

India’s AIF industry remains structurally strong and wealthy-backed, but its next phase will be defined less by rapid scale and more by credible returns, cost discipline, and regulatory-adjusted investor trust.

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Trump spooks bankers!!

Never one to stick to a job description, Trump has now upgraded from Fed-watcher, trade czar, energy guardian and global dealmaker to America’s chief credit-card negotiator. Wall Street, surprisingly, seems… amused.

• Floated a 10% cap on credit card interest for one year from Jan 20, 2026 — because why stop at tariffs when you can price loans too.
  • Fine print missing: legal basis, mechanics, and Congress’ blessing are all TBD — minor details in policymaking.
• A Vanderbilt study claims consumers could save $100 billion a year if such caps were permanent — bankers politely clutch calculators.
• In India, the idea could reopen the awkward conversation on credit card rates of 30–45% annualised, currently explained as “risk-based pricing”.

If Trump actually pulls this off, the global credit industry may be forced to rediscover restraint — and India may have to debate affordability without killing credit, a far harder trick than tweeting policy into existence.

 

 

 

 

 

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