Economic Weekly Wrap
02 Mar 2026 - 06 Mar 2026
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02 March 2026
Global markets remained cautious in today’s trading session, eyeing the ongoing conflict in the Middle East. The repercussions of US-Israel joint military strikes on Iran have been visible across major asset classes. Oil prices are trading higher by 6.3% at ~US$ 77/bbl from the previous close of US$ 72/bbl. Gold also firmed up by 1.5% and is trading at US$ 5,357/troy ounce today.
The risk-off sentiment was also reflected in rising demand for sovereign asset classes. Among major macro releases, US PPI increased by 0.5% on a sequential basis. The UK’s GfK consumer index softened, while Germany’s CPI remained below the 2% mark. Japan’s manufacturing PMI rose to a 45-month high in Feb’26, led by broad-based improvement in output, new orders, and employment.
On the domestic front, Feb’26 GST collection stood at Rs 1.83 lakh crore, reflecting buoyancy in economic activity.
- Stocks in the US declined amidst persistent AI concerns and tariff-related uncertainty. Tech and financial stocks declined the most.
- FTSE scaled a fresh record high as investors expect BoE to lower rates.
- Sensex dipped as metal and auto stocks declined and is trading weaker in line with other Asian markets due to geopolitical tensions.
Table 1 – Stock Markets
26-02-2026 27-02-2026 Change, % Dow Jones 49,499 48,978 (1.1) S & P 500 6,909 6,879 (0.4) FTSE 10,847 10,911 0.6 Nikkei 58,753 58,850 0.2 Hang Seng 26,381 26,631 0.9 Shanghai Comp 4,147 4,163 0.4 Sensex 82,249 81,287 (1.2) Nifty 25,497 25,179 (1.2) Source: Bloomberg, Bank of Baroda Research
DXY weakened tracking a fall in US treasury yields. Among major currencies, CNY fell the most by 0.2%. INR depreciated due to rising oil prices and is trading above the 91/$ mark today. Other Asian currencies are also trading weaker.
Table 2 – Currencies
26-02-2026 27-02-2026 Change, % EUR/USD 1.1797 1.1812 0.1 GBP/USD 1.3482 1.3482 0 USD/JPY 156.13 156.05 0.1 USD/INR 90.92 90.98 (0.1) USD/CNY 6.8475 6.8624 (0.2) DXY Index 97.79 97.61 (0.2) Source: Bloomberg, Bank of Baroda Research
Global 10Y yields fell sharply due to risk-off sentiment amid geopolitical tensions. US yields declined the most. Germany and UK yields also softened due to weaker macro data. India’s 10Y yield fell by 3bps and is currently trading at 6.69%.
Table 3 – Bond 10Y Yield
26-02-2026 27-02-2026 Change, bps US 4.00 3.94 (7) UK 4.27 4.23 (4) Germany 2.69 2.64 (5) Japan 2.16 2.12 (4) China 1.82 1.81 (1) India 6.69 6.66 (3)
Table 4 – Short Term Rates
26-02-2026 27-02-2026 Change, bps Tbill-91 days 5.27 5.24 (3) Tbill-182 days 5.46 5.41 (5) Tbill-364 days 5.55 5.51 (4) G-Sec 2Y 5.70 5.62 (8) India OIS-2M 5.32 5.32 0 India OIS-9M 5.42 5.41 (1) SONIA 3.73 3.73 0 US SOFR 3.67 3.67 0
Table 5 – Liquidity
Rs tn 26-02-2026 27-02-2026 Change Net Liquidity 2.1 2.9 0.8
Table 6 – Capital Market Flows
25-02-2026 26-02-2026 Change FII (US$ mn) 246.7 (286.2) (532.8) Debt 126.5 (19.0) (145.5) Equity 120.1 (267.2) (387.3) Mutual funds (Rs cr) (12,347.8) (511.5) 11,836.3 Debt (5,655.9) (4,963.4) 692.5 Equity (6,691.8) 4,452.0 11,143.8
Oil prices edged up tracking tensions between the US and Iran.
Table 7 – Commodities
26-02-2026 27-02-2026 Change, % Brent crude 70.8 72.5 2.4 Gold 5,185.0 5,278.9 1.8 Copper 13,235.0 13,294.0 0.4 Zinc 3,361.5 3,298.7 (1.9) Aluminium 3,157.5 3,140.0 (0.6) Source: Bloomberg, Bank of Baroda Research
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04 March 2026
The elevated geopolitical risk continued to manoeuvre market sentiments, with a fresh wave of strikes in Tehran. As per reports, the reverberation of war also spread across Qatar, Bahrain, and Oman. Global equity stocks declined across the board, with South Korean stocks falling the most since the global financial crisis of 2008.
The upward rally in oil continued. Over the last two trading sessions, oil prices rose by 15.1% and are trading higher by another 1% today at ~US$ 82/bbl, despite US assurances of safeguarding shipping through the Strait of Hormuz. DXY firmed up by 0.7%.
On the macro front, Australia’s GDP rose to 2.6% YoY in Q4 from 2.1% earlier. China’s manufacturing PMI edged down to 49 (from 49.3), while non-manufacturing PMI rose slightly to 49.5 (from 49.4). Fed officials indicated a cautious stance on interest rates.
- Global stocks witnessed a broad-based sell-off amid ongoing Middle East tensions.
- Investors assessed the impact of war on oil prices and inflation.
- Nikkei declined the most by 3.1%, while US indices extended losses.
- Sensex fell by 1.3% and continues to trade weaker along with other Asian markets.
Table 1 – Stock Markets
02-03-2026 03-03-2026 Change, % Dow Jones 48,905 48,501 (0.8) S & P 500 6,882 6,817 (0.9) FTSE 10,780 10,484 (2.7) Nikkei 58,057 56,279 (3.1) Hang Seng 26,060 25,768 (1.1) Shanghai Comp 4,183 4,123 (1.4) Sensex 81,287 80,239 (1.3) Nifty 25,179 24,866 (1.2) Source: Bloomberg, Bank of Baroda Research | Note: Indian markets were closed on 03-03-2026
Safe-haven demand pushed DXY higher as the Middle East crisis intensified. EUR depreciated by 0.6% due to rising Eurozone inflation in Feb’26. INR weakened to a record low due to rising oil prices. Other Asian currencies also traded weaker.
Table 2 – Currencies
02-03-2026 03-03-2026 Change, % EUR/USD 1.1688 1.1613 (0.6) GBP/USD 1.3407 1.3358 (0.4) USD/JPY 157.39 157.74 (0.2) USD/INR 90.98 91.48 (0.5) USD/CNY 6.9051 6.9181 (0.2) DXY Index 98.38 99.05 0.7 Source: Bloomberg, Bank of Baroda Research | Note: Indian markets were closed on 03-03-2026
Except China (stable), global 10Y yields closed higher. UK yields rose the most, followed by Japan and Germany. Inflation concerns and geopolitical tensions impacted yields. India’s 10Y yield is currently at 6.72%.
Table 3 – Bond 10Y Yield
02-03-2026 03-03-2026 Change, bps US 4.03 4.06 2 UK 4.37 4.47 10 Germany 2.71 2.75 4 Japan 2.09 2.14 5 China 1.80 1.80 0 India 6.66 6.68 1
Table 4 – Short Term Rates
27-02-2026 02-03-2026 Change, bps Tbill-91 days 5.24 5.22 (2) Tbill-182 days 5.41 5.42 1 Tbill-364 days 5.51 5.54 3 G-Sec 2Y 5.62 5.61 (1) India OIS-2M 5.32 5.34 2 India OIS-9M 5.41 5.42 1 SONIA 3.73 3.73 0 US SOFR 3.68 3.71 3
Table 5 – Liquidity
Rs tn 27-02-2026 02-03-2026 Change Net Liquidity 2.9 2.6 (0.3)
Table 6 – Capital Market Flows
26-02-2026 27-02-2026 Change FII (US$ mn) (286.2) (446.6) (160.4) Debt (19.0) 154.6 173.5 Equity (267.2) (601.1) (333.9) Mutual funds (Rs cr) (511.5) (5,536.8) (5,025.3) Debt (4,963.4) (10,261.5) (5,298.0) Equity 4,452.0 4,724.7 272.7
Oil prices rose to a ~14-month high as the Middle East crisis escalated.
Table 7 – Commodities
02-03-2026 03-03-2026 Change, % Brent crude 77.7 81.4 4.7 Gold 5,322.1 5,088.8 (4.4) Copper 13,034.0 12,911.1 (0.9) Zinc 3,296.4 3,250.3 (1.4) Aluminium 3,194.5 3,251.0 1.8 Source: Bloomberg, Bank of Baroda Research
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05 March 2026
Global markets witnessed some recovery after the rout in the previous session. Correction was seen in South Korean stocks, with the KOSPI index rising by 9% compared to the previous session’s loss of -12%.
Oil prices steadied at US$ 81/bbl; however, they are trading higher by 3.2% at US$ 84/bbl today. Gold prices also inched up by 1%, along with gains in other metals.
On the macro front, US private payroll data (ADP employment change) showed improvement, rising by 63K in Feb’26 compared to a revised 11K last month. The ISM services index also increased to 56.1 from 53.8, driven by new orders. In the UK and Germany, services PMI remained broadly stable. Meanwhile, China set a modest growth target of 4.5–5% for 2026. Domestically, markets are closely monitoring developments in West Asia.
- Asian stocks ended lower due to fears of prolonged Middle East tensions.
- Nikkei and Hang Seng recorded the largest declines.
- Sensex fell by 1.4%, led by losses in metal and oil & gas stocks.
- US and UK markets showed gains supported by strong economic data, led by tech stocks.
- Asian markets, including Sensex, are trading higher today following global cues.
Table 1 – Stock Markets
03-03-2026 04-03-2026 Change, % Dow Jones 48,501 48,739 0.5 S & P 500 6,817 6,870 0.8 FTSE 10,484 10,568 0.8 Nikkei 56,279 54,246 (3.6) Hang Seng 25,768 25,249 (2.0) Shanghai Comp 4,123 4,082 (1.0) Sensex 80,239 79,116 (1.4) Nifty 24,866 24,481 (1.5) Source: Bloomberg, Bank of Baroda Research | Note: Indian markets were closed on 03-03-2026
Except INR, other global currencies strengthened against the dollar. DXY eased despite rising US treasury yields. Investors continued monitoring geopolitical developments. INR depreciated to a record low due to rising oil prices but is trading stronger today along with other Asian currencies.
Table 2 – Currencies
03-03-2026 04-03-2026 Change, % EUR/USD 1.1613 1.1634 0.2 GBP/USD 1.3358 1.3375 0.1 USD/JPY 157.74 157.06 0.4 USD/INR 91.48 92.15 (0.7) USD/CNY 6.9181 6.8971 0.3 DXY Index 99.05 98.77 (0.3) Source: Bloomberg, Bank of Baroda Research | Note: Indian markets were closed on 03-03-2026
Except the US, global 10Y yields declined. Some risk-off sentiment still persists. In the US, stronger economic data pushed yields higher by 4bps. India’s 10Y yield remained stable and is currently at 6.68%.
Table 3 – Bond 10Y Yield
03-03-2026 04-03-2026 Change, bps US 4.06 4.10 4 UK 4.47 4.44 (3) Germany 2.75 2.75 0 Japan 2.14 2.12 (2) China 1.80 1.80 (1) India 6.68 6.67 0
Table 4 – Short Term Rates
03-03-2026 04-03-2026 Change, bps Tbill-91 days 5.22 5.31 9 Tbill-182 days 5.42 5.52 10 Tbill-364 days 5.54 5.59 5 G-Sec 2Y 5.61 5.65 3 India OIS-2M 5.34 5.34 0 India OIS-9M 5.42 5.45 3 SONIA 3.73 3.73 0 US SOFR 3.71 3.70 (1)
Table 5 – Liquidity
Rs tn 27-02-2026 02-03-2026 Change Net Liquidity 2.9 2.6 (0.3)
Table 6 – Capital Market Flows
27-02-2026 02-03-2026 Change FII (US$ mn) (286.2) (446.6) (160.4) Debt (19.0) 154.6 173.5 Equity (267.2) (601.1) (333.9) Mutual funds (Rs cr) (511.5) (5,536.8) (5,025.3) Debt (4,963.4) (10,261.5) (5,298.0) Equity 4,452.0 4,724.7 272.7
Oil prices remained stable as the US President pledged support for shipping through the Strait of Hormuz.
Table 7 – Commodities
03-03-2026 04-03-2026 Change, % Brent crude 81.4 81.4 0 Gold 5,088.8 5,140.4 1.0 Copper 12,911.1 13,038.5 1.0 Zinc 3,250.3 3,308.9 1.8 Aluminium 3,251.0 3,342.5 2.8 Source: Bloomberg, Bank of Baroda Research
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06 March 2026
Global markets remained watchful of developments in the Middle East, with no signs of de-escalation. Oil prices continued their rally, ending the last session higher by 4.9% at US$ 85.4/bbl. Since last Friday, oil prices have increased by 17.8%.
Gold prices softened as the DXY strengthened on the back of better economic data. The Fed Beige Book pointed to cautious optimism and modest recovery in economic activity, while US jobless claims remained broadly stable.
In China, Premier Li Qiang highlighted additional policy support for growth amid a lower growth target. On the domestic front, the US granted a temporary waiver to India for importing Russian oil. This applies to crude and petroleum products loaded before 5 March and remains valid until 4 April, providing short-term relief.
- Global stocks ended mixed, with Asian markets recovering.
- Nikkei rose the most by 1.9%, while US markets declined.
- FTSE fell by 1.5% amid rising oil prices.
- Sensex gained 1.1%, led by power and metal stocks, but is trading lower today.
Table 1 – Stock Markets
04-03-2026 05-03-2026 Change, % Dow Jones 48,739 47,955 (1.6) S & P 500 6,870 6,831 (0.6) FTSE 10,568 10,414 (1.5) Nikkei 54,246 55,278 1.9 Hang Seng 25,249 25,321 0.3 Shanghai Comp 4,082 4,109 0.6 Sensex 79,116 80,016 1.1 Nifty 24,481 24,766 1.2 Source: Bloomberg, Bank of Baroda Research
DXY gained due to safe-haven demand amid continued Middle East tensions. Among major currencies, JPY depreciated the most. INR recovered from a record low due to possible RBI intervention but is trading weaker today in line with other Asian currencies.
Table 2 – Currencies
04-03-2026 05-03-2026 Change, % EUR/USD 1.1634 1.1609 (0.2) GBP/USD 1.3375 1.3357 (0.1) USD/JPY 157.06 157.59 (0.3) USD/INR 92.15 91.60 0.6 USD/CNY 6.8971 6.9113 (0.2) DXY Index 98.77 99.32 0.6 Source: Bloomberg, Bank of Baroda Research
Concerns over elevated inflation outweighed risk-off sentiment. UK’s 10Y yield rose sharply by 10bps, followed by Germany, the US, and Japan. Some central banks are considering tightening due to rising oil prices. India’s 10Y yield fell by 3bps and is currently at 6.65%.
Table 3 – Bond 10Y Yield
04-03-2026 05-03-2026 Change, bps US 4.10 4.14 4 UK 4.44 4.54 10 Germany 2.75 2.84 9 Japan 2.12 2.16 4 China 1.80 1.80 0 India 6.67 6.64 (3)
Table 4 – Short Term Rates
04-03-2026 05-03-2026 Change, bps Tbill-91 days 5.31 5.31 0 Tbill-182 days 5.52 5.51 (1) Tbill-364 days 5.59 5.58 (1) G-Sec 2Y 5.65 5.66 2 India OIS-2M 5.34 5.34 0 India OIS-9M 5.45 5.46 1 SONIA 3.73 3.73 0 US SOFR 3.70 3.67 (3)
Table 5 – Liquidity
Rs tn 04-03-2026 05-03-2026 Change Net Liquidity 2.7 3.0 0.3
Table 6 – Capital Market Flows
02-03-2026 04-03-2026 Change FII (US$ mn) (187.5) (1,061.2) (873.7) Debt 139.3 (73.6) (212.9) Equity (326.8) (987.6) (660.8) Mutual funds (Rs cr) 6,464.1 3,004.1 (3,460.0) Debt (4,370.4) (3,135.3) 1,235.1 Equity 10,834.5 6,139.4 (4,695.1)
Oil prices rose as hostilities between the US, Iran, and Israel continued.
Table 7 – Commodities
04-03-2026 05-03-2026 Change, % Brent crude 81.4 85.4 4.9 Gold 5,140.4 5,082.3 (1.1) Copper 13,038.5 12,857.4 (1.4) Zinc 3,308.9 3,198.8 (3.3) Aluminium 3,342.5 3,296.0 (1.4) Source: Bloomberg, Bank of Baroda Research
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