• Foreign capital flows: FPI outflows reached 3 to 3.5 lakh over the past 6 to 7 months due to domestic valuations and high oil prices, though a trend reversal is emerging as foreign investors view oversold Indian markets more favorably.
• Domestic economic growth: India's economy is buoyed by 17% to 18% credit growth and a 15.5% rise in June GST collections, with the automotive manufacturing sector seeing July volume gains between 20% and 50%.
• Cost of capital: Rising global bond yields may elevate domestic borrowing costs, but a potential 50 basis point increase is not expected to derail India's corporate CapEx cycle or overall growth.
• Interest rate outlook: With high credit growth exerting short-term pressure on inflation, the RBI MPC is expected to maintain a rate pause in line with the US trajectory.