Indices trade in negative terrain; European mrkt advance
Investor sentiment remained cautious as market participants assessed the implications of the newly introduced Closing Auction Session (CAS), while also monitoring foreign institutional investment flows, crude oil prices, geopolitical developments, and global market cues for further direction.
Private bank, FMCG and media shares declined while realty, auto and metal shares advanced.
At 13:25 IST, the barometer index, the S&P BSE Sensex shed 14.16 points or 0.02% to 78,416.07. The Nifty 50 index declined 89.35 points or 0.36% to 24,526.
The broader market outperformed the frontline indices. The BSE 150 MidCap Index rose 0.39% and the BSE 250 SmallCap Index jumped 0.71%.
The market breadth was positive. On the BSE, 2,336 shares rose and 1,756 shares fell. A total of 226 shares were unchanged.
Gainers & Losers:
Grasim Industries (up 1.93%), Larsen & Tourbo (up 1.71%), HDFC Life Insurance Company (up 1.32%), Shriram Finance (up 1.26%) and Mahindra & Mahindra (M&M) (up 1.16%) were the major Nifty50 gainers.
HCL Technologies (down 1.71%), Tata Consultancy Services (TCS) (down 1.52%), ICICI Bank (down 1.35%), Apollo Hospitals Enterprise (down 1.35%) and Coal India (down 1.34%) were the major Nifty50 losers.
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.
Stocks in Spotlight:
Bharti Airtel added 0.79% after the telecom major reported a 41.63% year-on-year (YoY) jump in consolidated net profit to Rs 8,424.29 crore for the quarter ended 30 June 2026 (Q1 FY27) Consolidated revenue from operations increased 18.35% YoY to Rs 58,539.1 crore aided by robust growth across its India and Africa operations.
Protean eGov Technologies declined 7.49% after the company reported a sharp decline in profitability for the quarter ended 30 June 2026, as higher upfront investments and cost inflation weighed on margins. The company reported a 75.43% year-on-year (YoY) decline in consolidated net profit to Rs 5.86 crore in Q1 FY27 from Rs 23.85 crore in the corresponding quarter last year. Revenue from operations, however, rose 19.03% YoY to Rs 250.96 crore, supported by sustained momentum across its core businesses and strong traction in new initiatives.
Castrol India rose 2.36% after the lubricant maker reported strong earnings for the quarter ended 30 June 2026. The company's profit after tax increased 42.5% YoY and 43.6% QoQ to Rs 347.70 crore in Q2 CY2026. Revenue from operations rose 25.0% YoY and 21.1% QoQ to Rs 1,871.47 crore in the quarter ended 30 June 2026.
Ola Electric Mobility rose 7.21% 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. The company signed the MoU with Axis Energy, outlining the potential deployment of up to 20 GWh of battery energy storage systems (BESS) by 2032. The agreement also envisages scaling deployments to 5 GWh annually from 2028.
Oil and Natural Gas Corporation (ONGC) shed 0.90%. The company reported a 112.3% jump in standalone net profit to Rs 17,033.81 crore for the quarter ended 30 June 2026 (Q1 FY27), compared with Rs 8,024.23 crore in the corresponding quarter of the previous fiscal. Revenue from operations jumped 45.2% YoY to Rs 46,460.45 crore in the quarter ended 30 June 2026.
Global Market:
European market advanced amid of upbeat corporate earnings and lower crude oil prices helped investors look past ongoing geopolitical tensions and mixed economic data.
Asian markets jumped on Wednesday as strong earnings and a resurgence of demand for tech lifted Wall Street to record peaks.
The investor sentiment was further supported by an ongoing slide in oil prices as Qatar said mediators were making progress in efforts to end the U.S.-Iran war, though details were lacking.
Markets also sharply pared the probability of a September rate hike from the Federal Reserve to 57%, from 67%.
Fed Bank of Kansas City President Jeff Schmid, however, used a speech on Tuesday to call for tighter policy to help bring inflation back to the central bank's 2% target.
Overnight in the US, the S&P 500 and the Dow closed at record highs on Tuesday, powered by the latest batch of earnings from AI-related companies such as Caterpillar and Palantir that assuaged demand concerns.
The Dow Jones Industrial Average rose 907.47 points, or 1.71%, to 54,085.88, the S&P 500 gained 136.02 points, or 1.79%, to 7,736.52 and the Nasdaq Composite gained 671.10 points, or 2.59%, to 26,584.99.
Palantir Technologies soared 29.5% and recorded its biggest daily percentage gain since February 2024, after raising its annual revenue forecast.
Caterpillar, seen as a bellwether for the global industrial economy, jumped 5.6% after raising its annual revenue growth forecast, as the buildout of AI data centers has fueled demand for its power generation and construction equipment.
Investors have been closely monitoring results from AI-linked companies this earnings season for any signs the massive spending in the space will be justified.
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