Nifty Falls 0.4%, All 16 Sectors in Red as Realty, Mid-Caps Lead Losses

Market Update at 12:15 PM: Indian equity markets declined on Wednesday after the Reserve Bank of India (RBI) kept key interest rates unchanged and maintained its 'neutral' policy stance, disappointing investors who had anticipated a more dovish approach amid growing global trade uncertainties.

As of 11:10 a.m. IST, the Nifty 50 was down 0.4 per cent at 24,551.1 points, while the BSE Sensex dropped 0.3 per cent to 80,466.22. Both indices were largely flat ahead of the policy announcement but slipped soon after the central bank's rate pause.

The RBI, while reiterating that India’s domestic economic outlook remains “bright,” held the repo rate steady. This decision followed a surprise 50-basis point rate cut in June. The policy stance remained unchanged at "neutral," which analysts interpreted as a cautious move given current macroeconomic pressures.

Umesh Kumar Mehta, Chief Investment Officer at SAMCO Mutual Fund, stated, “Given that the Indian rupee is weakening and global interest rate differentials are narrowing, the scope for a rate reduction was slim.” Three analysts noted that despite rising expectations for a softer stance, the RBI’s cautious approach may have been its safest option for now.

All 16 major sectoral indices closed in the red. Rate-sensitive sectors witnessed sharper declines. The Nifty Realty index plunged 2.4 per cent, reflecting concerns about borrowing costs. The FMCG and Auto indices each fell 0.9 per cent, while the Financials index reversed earlier gains and was down 0.3 per cent.

Broader market indices also underperformed, with the Small-Cap and Mid-Cap segments falling 1.4 per cent and 1.2 per cent, respectively. Analysts attributed this underperformance to their larger exposure to the domestic economy and greater sensitivity to interest rate movements.

Market Update at 10:30 AM: Indian equity benchmarks opened largely unchanged on Wednesday as investors awaited the Reserve Bank of India’s (RBI) policy announcement, scheduled for 10:00 a.m. IST. Market participants are closely watching for signals that could help navigate rising global uncertainties, particularly the impact of proposed 25 per cent tariffs by the United States on Indian goods.

At the opening bell, the Nifty 50 fell marginally by 0.03 per cent to 24,641.35, while the BSE Sensex slipped 0.02 per cent to 80,694.98. Despite the flat indices, sectoral performance showed some optimism. Ten out of the 16 major sector indices recorded gains in early trade.

The broader market indices, including the Nifty Smallcap and Nifty Midcap, remained flat, indicating cautious sentiment across both small-cap and mid-cap segments. These indices have recently gained attention due to their multibagger returns in select stocks over the past year.

The RBI is widely expected to keep interest rates unchanged after a surprise 50-basis-point rate cut in June and a shift to a “neutral” stance. While the central bank had earlier signalled limited scope for further rate easing, expectations of a dovish tone have grown stronger, particularly in light of external risks including the recent U.S. tariff move.

Investors are also likely to focus on upcoming Quarterly Results, IPO activity, and any announcements related to dividends or bonus issues, which may further influence market direction in the short term

Pre-Market Update at 7:45 AM: On Wednesday, August 6, benchmark indices Nifty and Sensex are likely to open cautiously, as indicated by Gift Nifty, which was trading 25 points lower near the 24,679 mark at 7:14 AM. The market awaits the outcome of the Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting. The MPC is expected to keep interest rates unchanged at 5.50 per cent, but investor focus will remain on the RBI’s forward guidance.

Global cues remain mixed. Asian markets traded without clear direction, and Wall Street closed lower amid growing concerns over new tariff announcements. US President Donald Trump has signaled that the US may impose higher tariffs on India within 24 hours, citing New Delhi’s continued energy ties with Moscow. He also mentioned possible new tariffs on pharmaceuticals and semiconductors, which could impact trade-sensitive sectors globally.

Back home, key Q1 FY26 earnings announcements today include Bajaj Auto, Trent, Divis Laboratories, Bajaj Holdings & Investment, Pidilite Industries, Power Finance Corporation, Hero Motocorp, Bharat Heavy Electricals, Fortis Healthcare, UNO Minda, Jindal Stainless, Bharat Forge, HUDCO, KPR Mill, Blue Star, and Krishna Institute of Medical Sciences. These earnings will likely trigger stock-specific action across Large-Cap and mid-cap segments.

On the institutional front, Foreign Institutional Investors (FIIs) remained net sellers on August 5, offloading equities worth Rs 22.48 crore, extending their selling streak to 11 sessions. In contrast, Domestic Institutional Investors (DIIs) bought shares worth Rs 3,840.3 crore, marking 21 consecutive days of net buying.

The market ended Tuesday in negative territory, reacting to Trump’s tariff remarks. The Nifty 50 slipped 73 points to 24,649, while the Sensex lost 308 points to close at 80,710. Bank Nifty declined by 259 points to end at 55,360.

In the US, the Dow Jones Industrial Average fell 61.90 points to 44,111.74, the S&P 500 lost 30.75 points to 6,299.19, and the Nasdaq Composite declined by 137.03 points to 20,916.55. Earnings reports from companies like Yum Brands also highlighted tariff risks.

On the macroeconomic front, the US trade deficit narrowed by 16 per cent to USD 60.2 billion in June, mainly due to a fall in consumer goods imports. However, the US services sector showed weakness, with the ISM non-manufacturing PMI slipping to 50.1 in July from 50.8 in June.

In commodities, gold prices rose for the fifth straight session, backed by expectations of a possible rate cut by the US Federal Reserve. Spot gold was marginally lower at USD 3,378 per ounce in early trade. Crude oil prices traded firm, with Brent crude at USD 67.93 per barrel and WTI crude at USD 65.40 per barrel.

For today, PNB Housing remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.