Liquidity conditions and monetary policy operations from 6 May to 28 July 2026

• The European Central Bank reported that equity valuations in the euro area and the United States increased during the most recent review period. • Stock market gains were primarily driven by robust corporate earnings and a steeper yield curve, which is the difference between short-term and long-term interest rates.

• European Central Bank policymaker Martin Kocher stated on September 24 that the bank will decide on interest rates on a meeting-by-meeting basis. • Kocher told the Austrian newspaper Kurier that the bank has no pre-committed rate path due to economic uncertainty and energy shocks from the Middle East conflict.

• Norway's central bank, Norges Bank, raised its policy interest rate this morning to combat inflation. • The bank's monetary policy and financial stability committee increased the rate from 4.25% to 4.50%.

• Benchmark indices fell during afternoon trade as rising oil prices and high US Treasury yields weighed on domestic equities. • US private-sector output grew at its fastest pace in over five years in September, while a $70 billion five-year Treasury auction saw weak demand.

• European Central Bank official Isabel Schnabel stated in Salsomaggiore Terme, Italy, that the energy shock caused by the war in Iran is persisting and expanding. • The shock has widened beyond initial expectations to now include diesel and gas prices.

• Japan's S&P Global flash PMIs for September showed the private sector expanded for the 18th straight month on Thursday, September 24. • The data indicated that this expansion occurred at the slowest pace since May while price pressures remained elevated.

• S&P Global Economist Vishrut Rana reported on September 23 that India's economic growth outlook has improved due to strong domestic demand, trade momentum, and increased investment. • The growth is driven by a pickup in both public and private investment alongside resilient consumer spending.

• Asian stock markets declined recently as rising bond yields increased the discount rate used to value future corporate earnings. • China's Shanghai Composite fell nearly 1% and the blue-chip Shanghai Shenzhen CSI 300 declined 1.3%.

• Asian stocks and bonds were expected to decline on Thursday, September 24, following losses on Wall Street. • Market drops were driven by an oil rally and strong US economic data that increased fears of inflation and further interest rate hikes.

• The Sensex extended its losses on Thursday, dropping 800 points while broader markets like the Nifty MidCap and Nifty SmallCap fell 1.10 per cent and 0.7 per cent. • Insurance shares including PB Fintech and Max Financial Services declined by up to 10 per cent following a proposal from the Insurance Regulatory and Development Authority of India (IRDAI) to overhaul the insurance distribution framework.

• Legacy IAS published a news analysis on September 24, 2026, focusing on national and international issues for UPSC exam preparation. • The analysis highlights how rising U.S. Treasury yields and Federal Reserve rate hikes increase capital-flow volatility for emerging markets.