Benchmarks edge higher as RBI's growth outlook lifts investor sentiment

The benchmark indices ended higher on Wednesday after the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25% and retained its neutral policy stance. Investor sentiment was also supported by the RBI raising its FY27 GDP growth forecast to 6.7% and lowering its inflation projection to 5%. Firm global markets, sustained foreign institutional investor (FII) buying and softer crude oil prices further lifted sentiment. The Nifty ended above the 24,600 level. Realty and auto stocks led the gains, while FMCG, pharma and banking shares underperformed. Technically, the Nifty faces immediate resistance around the 24,775 level, while the 24,530 zone is expected to provide near-term support.

The S&P BSE Sensex jumped 152.05 points or 0.19% to 78,581. The Nifty 50 index rose 9.75 points or 0.04% to 24,624.65.

Shriram Finance (up 3.23%), Larsen & Toubro (up 1.68%) and State Bank of India (up 1.18%) boosted the Nifty higher today.

The broader market outperformed the frontline indices. The BSE 150 MidCap Index rose 0.34% and the BSE 250 SmallCap Index added 0.70%.

The market breadth was positive. On the BSE, 2,330 shares rose and 1,911 shares fell. A total of 216 shares were unchanged.

RBI MPC meeting:

The Reserve Bank of India (RBI) kept the policy repo rate unchanged at 5.25% at the conclusion of its three-day Monetary Policy Committee (MPC) meeting held from 3 to 5 August 2026.

The six-member MPC unanimously voted to keep the repo rate unchanged. Accordingly, the Standing Deposit Facility (SDF) rate remains at 5.00%, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.50%. The committee also retained its neutral policy stance.

The RBI revised its FY27 real GDP growth forecast upward to 6.7% from 6.6% projected in the previous policy review. Growth is projected at 7.0% in Q1, 6.4% in Q2, 6.5% in Q3 and 6.8% in Q4, with Q1 FY28 growth estimated at 7.3%. The central bank said domestic demand remains resilient, supported by strong private consumption, investment activity, services exports and government infrastructure spending.

The RBI, however, cautioned that global uncertainty, volatile energy prices, supply chain pressures, geopolitical tensions, and deficient and uneven monsoon conditions due to El Ni?o continue to pose risks to the growth outlook.

On inflation, the central bank projected CPI inflation at 5.0% for FY27, lower than its earlier estimate of 5.1%. Inflation is projected at 4.7% in Q2, 5.9% in Q3 and 5.5% in Q4, while Q1 FY28 inflation is estimated at 5.3%. Core inflation is projected at 4.3% for FY27.

The RBI said headline inflation is expected to rise mainly because of food and fuel-related supply-side pressures, while core inflation remains moderate. It added that uncertainty over monsoon conditions, global crude oil prices, geopolitical developments and global trade policies warrants caution before any policy action.

The central bank said it will continue to closely monitor incoming data and remain focused on aligning inflation with its medium-term target while supporting economic growth.

Economy:

India's services sector continued to expand in July, although growth slowed sharply, according to the latest HSBC India Services PMI survey. The Business Activity Index fell to 53.3 from 57.4 in June, marking the weakest expansion in 53 months while remaining above the 50-point threshold that separates growth from contraction.

At the broader level, the HSBC India Composite PMI Output Index declined to 54.3 from 57.1, signalling the slowest pace of private-sector expansion since March 2022, even as employment continued to rise and business confidence remained positive despite easing to a seven-month low.

Numbers to Track:

In the commodities market, Brent crude for September 2026 settlement jumped $1.33 or 1.68% to $80.69 a barrel.

The yield on India's 10-year benchmark federal paper slipped 0.43% to 6.787 compared with the previous session close of 6.816.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 95.1500 compared with its close of 95.2800 during the previous trading session.

MCX Gold futures for 5 October 2026 settlement jumped 1.31% to Rs 1,46,186.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.04% to 99.70.

The United States 10-year bond yield fell 0.32% to 4.612.

Global Markets:

The Dow Jones futures rose 212 points, signalling a positive opening for Wall Street.

Most European shares traded lower on Wednesday after a Houthi ballistic missile strike on a Saudi oil tanker and Iran's insistence that the Strait of Hormuz would remain closed dampened the optimism that had briefly lifted global markets.

On the macroeconomic front, the S&P Global UK Services PMI rose to 52.1 in July from 48.8 in June, returning to expansion territory for the first time in three months, although it remained below its long-run average of 54.2. The Composite PMI also improved to 52.2.

In the eurozone, producer prices fell 0.3% month-on-month in June, marking the first decline in four months as lower energy prices offset increases in other categories. On an annual basis, producer price inflation eased to 4.6% from 5.9% in May.

Asian indices ended higher, tracking record gains on Wall Street as strong corporate earnings and renewed demand for technology stocks boosted investor sentiment.

Market sentiment was also supported by lower crude oil prices after Qatar said mediators were making progress towards ending the US-Iran conflict, although no details of the proposed agreement were disclosed.

Investors also reduced expectations of a US Federal Reserve rate hike in September, with markets pricing in a 57% probability, down from 67% previously.

However, Kansas City Federal Reserve President Jeff Schmid reiterated that tighter monetary policy may still be needed to bring inflation back to the central bank's 2% target.

On Wall Street, the Dow Jones Industrial Average and the S&P 500 closed at record highs on Tuesday, supported by strong earnings from artificial intelligence-linked companies. The Dow rose 907.47 points, or 1.71%, to 54,085.88. The S&P 500 gained 1.79% to 7,736.52, while the Nasdaq Composite jumped 2.59% to 26,584.99.

Palantir Technologies surged 29.5% after raising its full-year revenue forecast, marking its biggest single-day gain since February 2024.

Caterpillar climbed 5.6% after lifting its annual revenue growth outlook, citing strong demand for power generation and construction equipment driven by the rapid expansion of AI data centres.

Investors continue to closely track earnings from AI-related companies for signs that heavy investment in the sector is translating into stronger business growth and profitability.

New Listing:

Shares of Manipal Health Enterprises ended at Rs 666.70 on the BSE, representing a premium of 13% as compared with the issue price of Rs 590.

The stock debuted at Rs 655, marking a premium of 11.02% to the issue price. The stock has hit a high of Rs 676.05 and a low of Rs 634.55. On the BSE, over 43.91 lakh shares of the company were traded in the counter.

Stocks in Spotlight:

Bharti Airtel added 0.40% 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.

Ola Electric Mobility rose 7.60% 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.

Protean eGov Technologies declined 8.22% 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 2.40% 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.

Kalyan Jewellers India declined 3.70%. 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.

Snowman Logistics added 2.76% after its standalone net profit jumped 78.74% to Rs 4.54 crore in Q1 FY27, compared with Rs 2.54 crore in Q1 FY26. Revenue from operations rose 78.74% YoY to Rs 117.67 crore in Q1 FY27, compared with Rs 162.69 crore in the year-ago quarter.

Godrej Properties rose 3.22%. The company reported a consolidated net profit of Rs 350.10 crore for the first quarter ended 30 June 2026, marking a 41.66% decline from Rs 600.12 crore recorded in the corresponding quarter of the previous fiscal. The company's total income fell 16.99% YoY to Rs 1,345.04 crore during the quarter, while profit before tax (PBT) declined 44.25% to Rs 479.71 crore.

Oil and Natural Gas Corporation (ONGC) shed 0.74%. 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.

Shlipa Medicare zoomed 12.93% after the pharmaceutical company reported a strong set of earnings for the quarter ended 30 June 2026, driven by robust growth in its formulations business The company's consolidated net profit jumped 115.19% year-on-year to Rs 100.88 crore in Q1 FY27 from Rs 46.88 crore in the corresponding quarter last year. Revenue from operations increased 44.89% YoY to Rs 465.78 crore, reflecting broad-based growth across its API, formulations and biologics businesses.

Deepak Nitrite added 0.37% after the company reported a strong set of earnings for the quarter ended 30 June 2026, with consolidated net profit more than tripling on the back of robust revenue growth and margin expansion. The company's consolidated net profit surged 207.5% year-on-year to Rs 345.02 crore in Q1 FY27 from Rs 112.20 crore in the corresponding quarter last year. Revenue from operations increased 36.39% YoY to Rs 2,577.60 crore, driven by healthy growth across its key business segments. Profit before tax (PBT) soared 202.2% YoY to Rs 467.63 crore during the quarter.

Initial Public Offer (IPO):

Ardee Industries received bids for 17,38,21,823 shares as against 5,84,22,516 shares on offer, according to stock exchange data at 16:42 IST on 05 August 2026. The issue was subscribed 2.98 times.

The issue opened for bidding on 5 August 2026 and will close on 7 August 2026. The price band of the IPO is fixed between Rs 50 and 53 per share. An investor can bid for a minimum of 281 equity shares and multiples thereof.

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