This is based on the Q1 CGA case study data. Fiscal deficit is at 18.2% of the full-year target after just Q1 (Apr-Jun). Last year it was 17.9% at the same point. So, a bit higher. In rupee terms, it's about 3.08 lakh crore spent, against a full-year target of 16.96 lakh crore.

I expected a print like that to spook the bond market at least a little. But the 10Y yield is actually lower than it was a few months back. It went up to around 7.13% in April-May and has now come down to 6.77%.

So the deficit number looks a bit hot, but yields aren't acting worried.

This is where I'm stuck. I always thought the chain was:
fiscal deficit goes up -> bond yields go up -> bank and NBFC stocks feel it, since they're rate-sensitive.

But if yields aren't even moving despite a hotter print, does any of this matter for someone who just holds equity and doesn't touch bonds directly?

Anyone here who tracks this stuff – is the fiscal deficit actually something equity investors should watch, or is it one of those numbers that gets more attention than it deserves if you're not in fixed income?

Saw the news about the US Senate passing a bill that could impose a tariff of up to 100% on countries buying a lot of Russian oil. India's named in it. This comes on top of a 25% tariff added earlier this year.

India buys Russian oil because it's cheaper and helps with fuel prices and inflation at home. But if these new tariffs actually get used, exports to the US could get a lot more expensive. Textiles, pharma, auto parts, and IT services seem like the ones most exposed.

It's not law yet, but it still needs to pass the House and get signed. So not panicking, just keeping an eye on it.

Went back and checked how some export stocks moved during the last tariff scare earlier this year, and it was pretty muted. Wondering if the market's already pricing this in.

Anyone adjusting their portfolio over this, or just watching for now?

Every time the Fed announces its decision, the headlines are predictable:

• Fed hikes rates → Indian markets may fall.
• Fed cuts rates → Bull market is back.

But is it really that simple?

A few things I've been thinking about:

1. A rate hike isn't automatically bearish.

Markets usually react to surprises, not the rate decision itself. A widely expected 25 bps hike can have little impact, while an unchanged rate with a hawkish statement can move markets much more.

2. Higher US rates don't always mean FIIs will exit India.

Foreign investors compare risk-adjusted returns. If India's earnings, growth, and macro outlook remain attractive, capital can still flow in despite higher US yields.

3. Over the long run, domestic factors matter more.

Corporate earnings, RBI policy, inflation, fiscal policy, and domestic liquidity have a much bigger influence on Indian markets than a single Fed meeting.

History is a good reminder:

• 2013: Taper Tantrum hit India hard with FII outflows and a weaker rupee.
• 2018: Fed hikes mattered, but oil prices, elections, and earnings also drove markets.
• 2022: Despite aggressive Fed tightening and heavy FII selling, strong DII buying and SIP inflows helped Indian markets recover relatively quickly.

Fast forward to June 2026. The Fed kept rates unchanged and signalled that inflation is easing but isn't fully under control. Markets interpreted it as "peak rates are probably behind us," but not an immediate pivot to cuts.

That could support:

• More stable FII flows
• Less pressure on the rupee
• Better sentiment for rate-sensitive sectors

But risks remain if US inflation picks up again or the dollar strengthens.

Personally, I think the biggest change over the last decade is India's domestic investor base. SIP flows and DIIs seem to absorb a lot more foreign selling than they used to.

Do you think India is becoming less dependent on the Fed, or do Fed decisions still drive our markets more than domestic fundamentals?

One of the biggest misconceptions in financial markets is that crises are always caused by bad assets or excessive leverage.

More often than not, they start with liquidity.

SEBI's June 19 circular allowing mutual funds to use intraday borrowing is an interesting step in addressing exactly that problem. On the surface, it looks like a technical operational change. But from a market structure perspective, it has broader implications.

What's the issue?

Imagine a debt fund has redemption requests to honour today, while cash from maturing TREPS, T-Bills, or G-Secs is only credited later the same day.

The fund isn't insolvent.
The assets exist.
The cash is simply arriving later.

Without a temporary liquidity bridge, the fund could be forced to sell securities purely because of timing—not because the portfolio is under stress.

What changes now?

SEBI now allows AMCs to borrow intraday to bridge these temporary cash mismatches.

SEBI has built-in key structural safeguards:

1. Zero Leverage: This cannot be utilised as a tool to increase a scheme's investment exposure or take on extra portfolio risk.
2. Strict Deadlines: The facility is purely intraday; positions must generally be extinguished by the end of the trading day...
3. AMC Absorbs Costs: The cost of setting up and utilising these borrowing lines cannot be charged to the scheme's Expense Ratio. The AMC pays for it out of its own pocket.

Why does this matter?

During periods of heavy institutional redemptions or volatile markets, forced selling can amplify price moves and reduce liquidity for everyone.

This framework reduces the likelihood that an operational cash-flow mismatch leads to unnecessary market selling.

Will it prevent every liquidity event? Of course not.

But it does improve the plumbing of India's mutual fund ecosystem by giving AMCs a controlled way to manage temporary cash shortages instead of immediately selling assets.

To me, this is one of those regulatory changes that probably won't make headlines but could quietly make the system more resilient over time.

Curious to hear what others think. Do you see this as a meaningful improvement in market infrastructure, or is its impact likely to be limited to day-to-day fund operations?