India Q1 GDP hits 7.8%, stocks rise on strong PMI, GST reforms
Indian stock markets rose after the country posted 7.8 percent economic growth in the first quarter of fiscal year 2026. The expansion marked the strongest performance in five quarters and came alongside a services sector index that climbed to 62.9 in August, its highest reading in more than 15 years. The GST Council added momentum by consolidating four tax brackets into two rates of 5 percent and 18 percent while proposing a 40 percent levy on luxury goods.
Markets gained additional strength when the Federal Reserve cut interest rates in September because of labor market weakness. Gains faced limits from uncertainty about trade talks between India and the United States, plus sustained selling by foreign institutional investors. Small-cap funds delivered the best average returns among equity mutual funds over five and 10-year periods. Credit risk funds led debt mutual fund categories with top average returns across six-month, one-year, three-year, and five-year timeframes.
