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Markets continue to trade below neutral lines
Aug-05-2026

Benchmarks continued to trade below the neutral line in late afternoon session amid uncertainty surrounding US-Iran diplomatic talks as US President Donald Trump has threatened very strong strike on Iran, if Iran continued to block the Strait of Hormuz. Nifty 50 was trading lower with 0.40% cut weighed by losses among market heavy weight like HDFC Bank, ICICI Bank and Reliance Industries. Similarly, Sensex was trading marginally lower with cut of around 0.10% amid sector specific buying led by auto and metal. Further, investors remained cautious as India's services sector growth fell to a 4.5-year low in July due to weak demand & fierce competition. The seasonally adjusted HSBC India Services PMI Business Activity Index fell to 53.3 in July from 57.4 in June. 

On the global front, Asian equity markets were trading mostly in green tracking positive cues from Wall Street overnight. European equity markets were trading higher driven by upbeat corporate earnings.

The BSE Sensex is currently trading at 78337.84, down by 91.11 points or 0.12% after trading in a range of 78285.74 and 79055.38. There were 14 stocks advancing against 16 stocks declining on the index.

The top gaining sectoral indices on the BSE were Auto up by 1.37%, Metal up by 1.28%, Realty up by 1.05%, Basic Materials up by 0.88% and Consumer Discretionary up by 0.84%, while Energy down by 0.53%, Oil & Gas down by 0.38%, Capital Goods down by 0.30%, TECK down by 0.26% and IT down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were State Bank of India up by 1.69%, Ultratech Cement up by 1.49%, Interglobe Aviation up by 1.35%, Mahindra & Mahindra up by 1.28% and NTPC up by 1.20%. On the flip side, TCS down by 1.67%, Bharat Electronics down by 1.36%, Reliance Industries down by 1.27%, HCL Technologies down by 1.19% and Sun Pharmaceutical Industries down by 1.01% were the top losers.

Meanwhile, in an expected move, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent for the fifth time in a row. Consequently, the standing deposit facility (SDF) rate remains at 5.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate remain at 5.50 per cent. The MPC also decided to continue with the neutral stance.

On the inflation front, CPI inflation for 2026-27 is projected to be 5.0 per cent, which is lower than 5.1 per cent projected in the June monetary policy review. Besides, CPI inflation for Q2:2026-27 projected at 4.7 per cent; Q3 at 5.9 per cent; and Q4 at 5.5 per cent. Inflation for Q1:2027-28 is projected at 5.3 per cent with risks being evenly balanced. Core inflation is projected at 4.3 per cent for 2026-27. Core inflation, excluding precious metals, is expected to be lower in the near term, suggesting that demand pressures remain contained. 

It said headline CPI inflation edged up above the target, as expected. The realised inflation for Q1, however, remained marginally lower than projections reflecting limited pass-through of cost pressures. The higher inflation is mostly on account of fuel and food with little signs of generalisation of price pressures so far. Core inflation excluding precious metals continues to be benign. As projected earlier, headline inflation is expected to rise further in the near term and peak in Q3:2026-27, primarily due to food and fuel, before moderating thereafter.

On the economy front, real GDP growth for 2026-27 is projected at 6.7 per cent, which is higher compared to 6.6 per cent projected in the June monetary policy review. Besides, GDP growth for Q1:2026-27 projected at 7.0 per cent; Q2 at 6.4 per cent; Q3 at 6.5 per cent; and Q4 at 6.8 per cent. Real GDP growth for Q1:2027-28 is projected at 7.3 per cent. Strong capacity utilisation, robust credit flow and the government’s continued thrust on infrastructure are expected to sustain investment activity. While services exports are expected to sustain, merchandise exports will be supported by the recent trade agreements and thrust on diversification.

The CNX Nifty is currently trading at 24516.65, down by 98.25 points or 0.40% after trading in a range of 24497.95 and 24677.60. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.41%, Shriram Finance up by 1.88%, Larsen & Toubro up by 1.37%, HDFC Life Insurance up by 1.32% and JSW Steel up by 1.31%. On the flip side, HCL Technologies down by 2.22%, TCS down by 1.99%, Apollo Hospitals Enterprise down by 1.49%, HDFC Bank down by 1.22% and JIO Financial Services down by 1.19% were the top losers.

Asian equity markets were trading mostly in green; Nikkei 225 surged 2300.47 points or 3.47% to 66,258.00, Taiwan Weighted added 1250.94 points or 2.8% to 44,611.60, Hang Seng advanced 76.08 points or 0.29% to 25,929.00, Shanghai Composite strengthened 56.15 points or 1.45% to 3,878.43, Jakarta Composite gained 35.92 points or 0.57% to 6,355.53 and KOSPI increased 239.31 points or 3.63% to 6,598.26, while Straits Times fell 37.14 points or 0.66% to 5,575.11.

European equity markets were trading higher; UK’s FTSE 100 increased 19.79 points or 0.18% to 10,899.17, France’s CAC rose 8.47 points or 0.1% to 8,675.10 and Germany’s DAX gained 33.75 points or 0.13% to 26,236.10.
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