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Capital Markets Landscape
Equity market indices
Performance across Indian equities was mixed in May 2026, with the Nifty 50 falling 2% MoM, the Nifty 500 remaining broadly unchanged, and the Nifty Midcap 50 gaining 4%. Relative to global peers, India underperformed the stronger rallies seen in developed markets such as Japan (+5%) and the US (+3–5%). However, Indian equities compared favourably with several emerging markets, with the Shanghai Composite rising only 1% and South Africa’s FTSE/JSE remaining broadly unchanged. The relative outperformance is notable given persistent FPI outflows and currency depreciation during the month, suggesting that robust domestic liquidity and confidence in India’s medium-term growth prospects continued to provide support to equity valuations.
Movement in global equity indices during the last two years (June’2023 = 100)
Source: LSEG Workspace, NSE EPR
Fund flows in India
Investor flows in May 2026 reflected a mixed shift in market participation. FPI outflows moderated to US$3.5bn from US$6.5bn in April, indicating a partial easing in foreign selling pressure. In contrast, DII inflows strengthened sharply to US$8.7bn from US$5.5bn in the previous month, more than offsetting foreign outflows, while individual investor inflows moderated to US$0.3bn from US$2.2bn. So far this calendar year, the net inflows of DIIs and individual investors aggregating US$ 41 bn and US$ 3.8 bn respectively has cushioned the net FPI outflows of US$ 24 bn.
Monthly Trends in equity fund flows across FPIs, DIIs and individual investors
Source: NSDL, LSEG Workspace and NSE EPR
Fund mobilisation
Total fund mobilisation remained strong at US$ 161 bn in FY26, marginally lower than US$ 176 bn in FY25. Of the total, fund raising through equity stood at US$ 51 bn during the year while debt raising stood at US$ 107 bn. In the first month of the fiscal, total funds raised stood at US$ 9.6 bn, led by strong equity inflows of US$ 5.9 bn via equities even as the funds mobilised through debt were significantly lower at US$ 3.7 bn.
Trends in absolute fund mobilisation across equity, debt and REITs-InvITs in India
Source: SEBI, LSEG Workspace, NSE EPR
MF flows and total AUM
In May 2026, mutual funds witnessed net outflows of US $ 6.7 bn in May, primarily led by outflows from debt segment and lower equity inflows. That said, average AUM of the MF industry has scaled a record high level and stood at US$ 890 bn.
Trends in net fund flows and average assets under management of mutual funds
Source: AMFI, CMIE Economic Outlook, LSEG Workspace, NSE EPR
Demat account numbers and MF folios
Total demat accounts in India has reached 228.9 million while MF folios rose to a record 276.6 million as of May 2026, reflecting sustained growth in retail investor base and increasing financialisation of household savings.
Trends in number of demat accounts and MF folios
Source: CMIE Economic Outlook, NSE EPR
India’s Weight in MSCI EM
Trends in number of demat accounts and MF folios
Source: MSCI Index Factsheet