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Capital Markets Landscape

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Equity market indices

Performance across Indian equities improved in June 2026, with the Nifty 50 and Nifty 500 gaining 1.4% and 1.5% MoM, respectively, led by a 4.0% sequential rise in the small cap index. Relative to global peers, Indian equities outperformed several major emerging markets, with the Shanghai Composite increasing a modest 0.6%, South Africa’s FTSE/JSE falling 4.6% and Brazil posting a 1.0% decline in Jun’26. Among developed markets, performance was mixed, with India outperforming the S&P 500 (-1.1% MoM) but trailing the stronger gains recorded by the Dow Jones Industrial Average (+2.5% MoM) and Japan’s Nikkei 225 (+5.6% MoM). The resilience of Indian equities despite continued net FPI outflows during the month reflects the continued support from strong domestic institutional and retail participation, alongside improving foreign investor sentiment towards the latter half of June’26.

Movement in global equity indices during the last two years (June’2023 = 100)

Source: LSEG Workspace, NSE EPR

Investor flows in June 2026 highlighted the continuing divergence between foreign and domestic participation. FPIs turned net buyers in the latter half of the month—their first sustained bout of buying since the West Asia conflict began—but heavy first-half selling left net FPI outflows for the month widening to US$ 5.2bn. The recovery in foreign investor sentiment was supported by easing geopolitical tensions, softer crude oil prices, improving valuations following the recent correction and renewed buying interest in financials. Meanwhile, DII inflows strengthened further to US$ 9.0 bn from US$ 8.7bn in May’26, more than offsetting foreign selling, while individual investor inflows rebounded sharply to US$ 2.0bn from US$ 0.3bn. Consequently, for the calendar year, cumulative net inflows of DIIs and individual investors reached US$ 50.4bn and US$ 5.8bn, respectively, comfortably offsetting cumulative FPI outflows of US$ 29.3bn, underscoring domestic investors’ increasing role in anchoring Indian equity markets.

Monthly Trends in equity fund flows across FPIs, DIIs and individual investors

Source: NSDL, LSEG Workspace and NSE EPR

Total fund mobilisation in the first two months of FY27 remained robust at USD 17.5 bn, although lower than USD 29 bn in the corresponding period of the previous year. In May, companies raised USD 7.5 bn, comprising USD 1.7 bn through equity issuances and USD 5.3 bn through debt issuances, with overall fundraising sequentially moderated by weaker equity issuance activity. The recent moderation equity IPO activity can be ascribed to the West Asian conflict and associated volatility in the equity markets.

Trends in absolute fund mobilisation across equity, debt and REITs-InvITs in India

Source: SEBI, LSEG Workspace, NSE EPR

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In June 2026, mutual funds recorded net outflows for the second consecutive month, amounting to USD 5.6 billion, primarily driven by outflows from debt segment (USD 11.8 bn) which were partly offset by stable equity inflows (USD 3.1 bn). Average AUM of the MF industry for the month of June stood at USD 887 bn, marginally lower than the peak of USD 919 bn recorded in February 2026.

Trends in net fund flows and average assets under management of mutual funds

Source: AMFI, CMIE Economic Outlook, LSEG Workspace, NSE EPR

Total demat accounts in India has reached 231.5 million while MF folios rose to a record 278.6 million as of June 2026, reflecting continued expansion of the retail investor base and the increasing financialisation of household savings.

Trends in number of demat accounts and MF folios

Source: CMIE Economic Outlook, NSE EPR

Trends in number of demat accounts and MF folios

Source: MSCI Index Factsheet