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India's Economy Surges 8.2% Amidst Market Dip
28 Nov
Summary
- Indian economy expanded by 8.2% in Q2 FY 2025-26.
- Equity benchmarks declined, halting a two-day rally.
- Secondary and tertiary sectors drove the GDP growth.
India's real Gross Domestic Product (GDP) experienced a significant expansion of 8.2% in the second quarter of FY 2025-26, marking a substantial increase from the previous year's 5.6%. This robust growth was primarily fueled by the secondary sector, which saw an 8.1% rise, and the tertiary sector, with a 9.2% increase. Manufacturing and construction sectors performed strongly, while financial, real estate, and professional services also contributed significantly to the economic upswing.
Despite the strong economic performance, the equity markets faced headwinds. The headline equity barometers slipped marginally, halting a two-day winning streak. This decline was attributed to profit-booking activities at higher levels, overshadowing the positive GDP figures. Mixed signals from global markets also prompted investors to remain on the sidelines, leading to a dip in key indices like the Nifty and Sensex.
In other economic indicators, the nominal GDP grew by 8.7% in the same quarter. Real Private Final Consumption Expenditure (PFCE) reported a healthy 7.9% growth. Meanwhile, bond yields saw a slight increase, and the Indian rupee edged lower against the US dollar. Commodities like gold and Brent crude experienced moderate gains.
