The Indian rupee slid to record lows, dipping below the crucial 96 level in intraday trade and weakening to 96.05 per US dollar, after briefly touching a fresh trough near 96.14. Analysts pointed to a mix of forces: higher Brent crude prices, a firmer US dollar, and hawkish signals from American policy makers. Persistent foreign capital outflows and soft net FDI inflows weighed on the balance of payments even as exports rose in April.
Foreign portfolio investors have sold over Rs 2 lakh crore of Indian equities in 2026, continuing a streak of net selling for the third month. Domestic investors are stepping in to buy, but stocks are still falling. Analysts say India is not pulling in enough foreign capital, hitting large companies hardest, while smaller firms find more support from local funds.
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In FY26, Indian businesses are leaning more on bank lending as the dominant source of corporate funding, hitting a three-year peak in total resource mobilisation. Though foreign capital and bond markets saw activity, their scale paled compared with banks. The shift signals a notable change in how companies are financing growth, with credit markets playing a bigger role again.
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