Indices trade with sideways; private bank shares decline for 2nd day
At 12:28 IST, the the S&P BSE Sensex, jumped 126.81 points or 0.13% to 78,529.76. The Nifty 50 index fell 62.15 points or 0.26% to 24,550.75.
The broader market outperformed the frontline indices. The BSE 150 MidCap Index added 0.38% and the BSE 250 SmallCap Index rose 0.65%.
The market breadth was positive. On the BSE, 2,308 shares rose and 1,518 shares fell. A total of 207 shares were unchanged.
RBI MPC meeting:
The Reserve Bank of India (RBI), at its monetary policy meeting held from 3 August to 5 August 2026, kept the policy repo rate unchanged at 5.25% and retained its 'neutral' policy stance. RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously voted to leave the benchmark policy rate unchanged.
The MPC raised its FY27 GDP growth forecast to 6.7% from 6.6% earlier. It projected FY27 CPI inflation at 5%, 10 basis points lower than the previous estimate, while core inflation was expected to average 4.3% during the year. Quarterly CPI inflation projections were placed at 5.3% for Q1, 4.7% for Q2, 5.9% for Q3 and 5.5% for Q4.
Malhotra said the impact of El Nino on the temporal and spatial distribution of rainfall remained a key risk to the inflation outlook. He added that global crude oil prices continued to witness sharp volatility due to geopolitical developments, clouding the near-term inflation trajectory. While underlying inflationary pressures remained contained, the risk of second-round effects from higher food, fuel and other input costs feeding into broader inflation persisted.
The MPC's decision came amid a challenging macroeconomic environment, with the lingering impact of the US-Iran conflict on domestic growth and inflation. However, easing crude oil prices and hopes of a peace deal improved market sentiment.
Economy:
India?s services sector continued to expand in July, but growth slowed sharply, according to the latest HSBC India Services PMI. The Business Activity Index fell to 53.3 in July from 57.4 in June, marking the weakest pace of expansion in 53 months, though remaining above the neutral 50.0 level.
New business inflows also grew at their slowest rate since February 2022, as firms reported softer demand, intense competition, fewer enquiries and delayed orders. However, export demand remained strong, with companies citing increased business from the UAE, UK and US. Among major segments, only Finance & Insurance recorded faster growth in output and sales.
Employment growth improved from June?s six-month low, although hiring remained modest. Around 6% of firms increased payrolls, while 92% reported no change. Lower bookings and weak sales also helped companies reduce backlogs at the fastest pace in nearly five years.
Input cost inflation eased to its lowest level since January and a six-month low overall, despite higher fuel, labour, material, technology and transport costs. At the same time, firms raised selling prices at the quickest pace since April.
At the broader level, the HSBC India Composite PMI Output Index declined from 57.1 in June to 54.3 in July, signalling the slowest private-sector growth since March 2022, although employment continued to rise and business confidence remained positive despite slipping to a seven-month low.
Derivatives :
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.69% to 12.28. The Nifty 25 August 2026 futures were trading at 24,645 at a premium of 94.25 points as compared with the spot at 24,550.75.
The Nifty option chain for the 25 August 2026 expiry showed a maximum call OI of 53.3 lakh contracts at the 25,000 strike price. Maximum put OI of 81.3 lakh contracts was seen at a 24,000 strike price.
Buzzing Index:
The Nifty Private Bank index fell 0.69% to 27,669.10. The index fell 1.34% in the two consecutive trading sessions.
Federal Bank (down 1.35%), IDFC First Bank (down 1.23%), Axis Bank (down 0.88%), ICICI Bank (down 0.76%) and HDFC Bank (down 0.71%), IndusInd Bank (down 0.29%), Kotak Mahindra Bank (down 0.29%), Yes Bank (down 0.13%) fell.
On the other hand, RBL Bank (up 1.59%) ,Bandhan Bank (up 0.78%) added.
Stocks in Spotlight:
Kalyan Jewellers India fell 3.23% after the company reported a 32.02% increase in consolidated net profit to Rs 348.66 crore on a 45.68% rise in revenue from operations to Rs 10,588.92 crore in Q1 FY27 compared with Q1 FY26.
Ola Electric Mobility rose 2.87% after the company announced its entry into the utility-scale battery energy storage segment by signing its first memorandum of understanding (MoU) for its upcoming Mahashakti platform.
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