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Thursday, 3 September 2026 · pre-open edition · overnight moves, fresh filings & what should matter in today's session

Snapshot · commodities, rates & macro

The big picture: a war rally in oil meets a wall of domestic liquidity

• Overnight, in one paragraph. US stocks rose for the first time in four sessions on Wednesday (Dow +0.56% to 53,061.95, S&P 500 +0.46% to 7,666.60, Nasdaq +0.45% to 26,217.83) after President Trump said the bombing campaign against Iran would not last "too long" & repeated that the US controls the Strait of Hormuz. Oil eased off its highs, the 10-yr Treasury yield slipped from 4.81% (a level last seen in November 2023) to 4.77%, & Dell surged on a record AI-server quarter. Asia followed this morning: Nikkei +0.2%, Kospi +1.4%, Hang Seng +0.1%, Shanghai +0.4%.
• The after-hours wrinkle. Broadcom reported after Wednesday's close: revenue $29.6 bn, up 86% on the year, with AI semiconductor revenue of $16.7 bn, up 221%. Both were above consensus, but the Q4 revenue guide of $34.8 bn came in slightly below the $35.03 bn the market wanted, & the stock fell after hours. Expensive AI names are now being marked against expectations, not against results; that is worth remembering as a template for the rest of earnings season.
• India's morning. Wednesday was the third straight losing session (Sensex -374 to 76,570.35; Nifty -141 to 23,914.45) on the Brent spike & rising yields. This morning the market bounced: by mid-morning the Sensex was up ~230 points near 76,800, the Nifty near 24,000, smallcaps up over 1%, while IT fell ~1.1% (Infosys & TCS dragged, partly the strong rupee: a stronger rupee shrinks the rupee value of dollar revenues). The rupee's 69-paise jump to 94.27, its best level since June 29, is the single most important domestic variable this morning: it suggests the RBI's $136 bn dollar-raising exercise may have turned the currency's momentum.
• The tension to carry through the day. Two opposing forces are pulling: on one side, war-driven oil near $95 & a US bond market pricing roughly two-in-three odds of a September rate HIKE (not a cut); on the other, an unusually strong domestic base: Q1 GDP growth of 7.8%, August GST collections up 14.8%, & a Rs. 7.76 lakh crore liquidity surplus. Friday's US payrolls report is the release most likely to settle the Fed question.

Global & overnight markets

• The US session. Wednesday's gains (Dow +0.56%, S&P +0.46%, Nasdaq +0.45%, Russell 2000 +1.1%) snapped a three-day slide. The bid came from two places: Trump's remark that the Iran campaign would not last long, which took oil off its highs, & Dell's quarter, which reset AI-hardware expectations. Dell's numbers deserve the detail: revenue $46.97 bn, up 58% on the year; adjusted EPS $7.04, up 203%; AI-server revenue $16.4 bn in the quarter with a $95 bn AI backlog; & full-year guidance raised to ~$192 bn including $74 bn of AI-optimised servers. That last number is the one to hold onto: a single company now expects to ship $74 bn of AI servers this fiscal year.
• The war & the strait, in plain terms. The US struck Iranian coastal military targets twice in three days this week (radar & mine-laying capability around Bandar Abbas, Jask & Qeshm) after two tankers were hit leaving the Gulf & Iran attempted sea-mine laying; Iran fired missiles & drones at US interests, with Jordan & Bahrain hit. The Strait of Hormuz, which normally carries about a fifth of the world's oil, recorded just 6 transits on Aug 30 against a pre-crisis norm of ~85 a day, with ~465 vessels waiting at anchor. That is why Brent at $95 coexists with talk of de-escalation: the physical chokepoint is still mostly shut.
• Japan & the yen. The yen strengthened sharply to ~157.8/$ from above 160 earlier in the week. Two forces: suspected intervention (Japan & the US confirmed a rare joint intervention on Aug 3, so the market treats every sharp move as official), & hawkish Bank of Japan commentary, with board member Takata keeping the door open to back-to-back hikes. A firmer yen matters to India indirectly: it pressures the dollar broadly, which helped the rupee's move this morning.
• Asia this morning. Nikkei +0.2% (64,456), Kospi +1.4% (6,657, chip-led: Samsung & SK Hynix up), Hang Seng +0.1%, Shanghai +0.4%, ASX +0.5%. US futures were little changed early, with Broadcom's guidance the overhang for tech.

Macro: a 7.8% economy with a 52.8 factory pulse, & the $136 bn rupee rescue

• The GDP figure & what sits inside it. Q1 FY27 GDP grew 7.8% on the year (released Aug 31; the finance minister cited it again yesterday), slowing from 8.6% in Q4 FY26 but far above what a quarter of war & $95 oil might have produced. The composition is the story: gross fixed capital formation, meaning investment in machines, buildings & infrastructure, grew 11.9%; manufacturing grew 9.2%; capital-goods output rose 15.2% & electrical equipment 27%. Private consumption grew a moderate 7.1%. In plain terms: the capex engine, government & private, is doing the pulling. The honest caveat: some economists question whether price deflators flatter the real number, so treat 7.8% as directionally strong rather than precisely measured.
• The two-speed pulse. August manufacturing PMI fell to 52.8, the lowest in five years, with employment shrinking for the first time in over two years; services PMI, finalised this morning, rose to 54.1 from 53.3 (below the 54.5 flash). A PMI is a survey where 50 separates expansion from contraction, so factories are still growing, just at the slowest pace since 2021, while services accelerate. Squaring this with 9.2% manufacturing GVA growth in Q1 is genuinely hard; either the PMI is catching a late-quarter slowdown that the GDP data has not yet, or survey pessimism is overdone. Q2 data will arbitrate.
• The external account. The Q1 current account deficit came in at $4.2 bn, or 0.5% of GDP: a wider merchandise trade gap ($86.1 bn) offset by record services exports ($51.6 bn surplus) & remittances ($42.9 bn). Foreign institutional investors pulled out $9.6 bn in the quarter, which is the number that explains most of the rupee's first-half pain.
• The FCNR(B) story, told properly. What is an FCNR(B) deposit? A foreign-currency deposit an overseas Indian places with an Indian bank, where the depositor, not the bank, keeps the currency risk. In June, with the rupee at a record 96.89/$ & Brent above $110, the RBI opened a concessional swap window: banks raise these dollar deposits & swap them with the RBI at a subsidised cost, echoing the 2013 playbook. The window closed Aug 31 having drawn $127.22 bn via FCNR(B) & $136.37 bn in total, roughly ten times the 2013 haul. Consequences now visible: the rupee at 94.27 (strongest since June), a banking liquidity surplus of Rs. 7.76 lakh crore, the call rate at 5.02% (below the 5.25% repo, meaning banks lend to each other cheaper than the RBI's own rate), & GST-collection-supportive demand. The other side: these are 3-5 year dollar liabilities that must eventually be repaid or rolled; this is borrowed stability, well borrowed.
• GST & the fiscal pulse. August gross GST collections were Rs. 1,99,853 crore, up 14.8% on the year, with refunds up 68% (faster refunds are working-capital relief for exporters). Nominal collections growing ~15% is consistent with the strong GDP picture.
• The Fed, framed for Indian rates. Chair Kevin Warsh's Jackson Hole message (inflation has not "meaningfully improved") has markets pricing roughly two-in-three odds of a September HIKE; the 10-yr touched 4.81%, highest since November 2023, & the 30-yr sits near 5.27%. For India: a hiking Fed limits how much the RBI (repo 5.25%, next meeting Oct 5-7) can ease even with liquidity this loose, & keeps pressure on the G-sec long end. Friday's US payrolls is the release that will move this needle first.