Domestic equity markets gain momentum on back of resilient Q1 GDP data
Domestic equity markets went up following robust macroeconomic indicators, as India’s economy expanded by 7.8 per cent year-on-year (YoY) in Q1 FY26, marking the strongest growth in five quarters, a report said on Wednesday.
While the Services PMI surged to 62.9 in August 2025, its highest level in over 15 years, driven by a sharp rise in new orders and resilient demand.
"Sentiment was further boosted as the GST Council simplified the existing four tax slabs (5, 12, 18, 28 per cent) into a two-rate structure of 5 per cent and 18 per cent -- and proposed a special 40 per cent slab for select luxury items such as high-end cars, tobacco, and cigarettes," ICRA Analytics said in its report.
Equity markets gained further extension after the US Federal Reserve delivered its first rate cut of the year in September, citing recent weakness in the labour market.
However, overall gains were capped amid lingering uncertainty over India–US trade negotiations and continued foreign institutional investor outflows from domestic equities.
Meanwhile, according to the report, among the trends spotted in the Equity Mutual Fund category (as on September), all categories across equity mutual funds gave positive category average returns over 3-year, 5-year and 10-year period; small cap Fund gave maximum category average return over 5-year and 10-year period; and large cap fund gave negative category average returns of around 4.92 per cent over 1-year period.
Similarly, there were trends spotted in the Debt Mutual Fund category this month. Credit risk funds gave maximum average returns over 6-month, 1-year, 3-year and 5-year periods. Low-duration fund gave the maximum average return over 1 month (18.57 per cent).
All categories across debt mutual funds gave positive returns across 1-year, 3-year, 5-year and 10-year periods, and credit risk funds gave maximum average returns over 6-month, 1-year, 3-year and 5-year periods.
