Fitch Lifts India’s FY26 Growth Forecast to 7.4%

Global rating agency Fitch has revised India’s growth outlook upward, projecting the economy to expand by 7.4% in FY26, compared to its earlier estimate of 7.2%. The revision reflects stronger-than-expected domestic demand, resilient investment activity, and continued momentum in infrastructure spending.

Key Drivers Behind the Upgrade

  1. Robust Domestic Consumption
    • Household spending remains strong, supported by rising incomes and urban demand.
    • Rural consumption is expected to improve further with favorable monsoon conditions and government support schemes.
  2. Investment Momentum
    • Public sector infrastructure investments continue to drive growth, particularly in roads, railways, and energy.
    • Private sector capital expenditure is gradually picking up, aided by improved corporate balance sheets and credit availability.
  3. Manufacturing and Services Expansion
    • The government’s push under “Make in India” and PLI schemes has boosted manufacturing output.
    • Services, especially IT and financial services, remain strong contributors to GDP growth.
  4. Global Positioning
    • Despite global uncertainties, India’s relative stability and large domestic market make it a preferred investment destination.
    • Fitch noted that India’s growth trajectory is significantly higher than most major economies.

Risks and Challenges

  • External Headwinds: Slowing global trade and geopolitical tensions could weigh on exports.
  • Inflationary Pressures: Rising food and energy prices may challenge monetary policy.
  • Fiscal Balance: Higher government spending on infrastructure and welfare programs could impact fiscal consolidation targets.

Market Implications

The upward revision in India’s growth forecast is expected to boost investor confidence. Equity markets may see renewed interest in sectors such as banking, infrastructure, and consumer goods. Bond markets could also benefit from stronger growth prospects, though inflation risks remain a concern for yields.

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Conclusion

Fitch’s upward revision of India’s FY26 growth forecast to 7.4% underscores the country’s resilience and strong domestic fundamentals. While challenges remain, India’s growth story continues to stand out globally, driven by consumption, investment, and structural reforms. For investors, this provides a favorable backdrop to explore opportunities across multiple sectors, with professional research and guidance playing a crucial role in maximizing returns.

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Closing Bell: Sensex, Nifty End Marginally Higher, Snap Four-Day Losing Streak

Indian equity markets closed on a positive note on December 4, 2025, after a volatile trading session. The benchmark indices, Sensex and Nifty, managed to break a four-day losing streak, supported by selective buying in banking, IT, and FMCG counters.

Market Performance

  • Sensex closed marginally higher, recovering from intraday weakness as investors looked for value in beaten-down stocks.
  • Nifty 50 also ended in the green, though gains were limited due to profit booking in metals and energy shares.
  • Broader markets showed mixed trends, with midcap and smallcap indices underperforming the benchmarks.

Sectoral Highlights

  • Banking & Financials: PSU banks saw mild recovery after recent declines, while private banks provided stability.
  • IT Stocks: Benefited from rupee weakness, with Infosys and TCS contributing to index gains.
  • FMCG: Defensive buying supported the sector amid global uncertainty.
  • Metals & Energy: Witnessed selling pressure, capping overall market upside.

Key Drivers of the Session

  1. Global Cues: Asian markets traded mixed as investors awaited clarity on US monetary policy.
  2. Currency Movement: The rupee’s weakness against the dollar boosted IT exporters, aiding sentiment.
  3. Domestic Flows: Retail and domestic institutional investors provided support, offsetting foreign outflows.
  4. Volatility: Despite the positive close, intraday swings highlighted caution among traders.

Investor Sentiment

The market’s ability to snap its losing streak, even with marginal gains, reflects resilience amid global and domestic challenges. Traders remain cautious ahead of key macroeconomic data releases and the upcoming derivatives expiry later this month.

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Conclusion

The Sensex and Nifty’s marginal gains today mark a pause in the recent downtrend, underscoring the importance of selective sectoral strength. While volatility persists, the market’s resilience highlights investor confidence in India’s long-term growth story. Going forward, global cues, currency trends, and domestic policy signals will continue to shape market direction.

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