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Market Commentary - Mid-Session

6 Aug '25|1:37 PM

Sensex remains rangebound; Nifty below 24,650; European mrkt opens higher

The headline equity indices traded near the flatline with some negative points in the afternoon trade as the Reserve Bank of India kept the repo rate unchanged at 5.5% and maintained a neutral policy stance.

The Nifty traded below the 24,650 mark. PSU Bank, private bank and bank shares advanced while pharma, IT and media shares declined.

At 13:30 IST, the barometer index, the S&P BSE Sensex, shed 42.71 points or 0.05% to 80,672.44. The Nifty 50 index fell 28.65 points or 0.09% to 24,620.90.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.71% and the S&P BSE Small-Cap index fell 1.03%.

The market breadth was weak. On the BSE, 1,257 shares rose and 2,651 shares fell. A total of 149 shares were unchanged.

Gainers & Losers:

Asian Paints (up 2.61%), HDFC Life Insurance Company (up 1.71%), Trent (up 1.50%), Titan Company (up 0.97%) and Coal India (up 0.94%) were the major Nifty50 gainers.

Wipro (down 1.57%), Bajaj Finance (down 1.45%), Jio Financial Services (down 1.35%), Dr Reddy's Laboratories (down 1.43%) and Nestle India (down 1.35%) were the major Nifty50 losers.

RBI Monetary Policy Meeting Outcome:

Banking stocks edged lower after the Reserve Bank of India's Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate unchanged at 5.5% in its latest review, concluding on 6 August 2025.

The committee maintained its stance amid global uncertainties and a resilient domestic economy, choosing to allow more time for the transmission of its earlier rate cuts.

Accordingly, the standing deposit facility (SDF) rate remains at 5.25%, while the marginal standing facility (MSF) rate and the bank rate are unchanged at 5.75%.

The RBI reiterated its commitment to achieving the medium-term inflation target of 4%, within a tolerance band of +/- 2%, while continuing to support growth. It noted that the global environment remains uncertain, with muted growth and uneven disinflation, although financial volatility has eased somewhat.

On the domestic front, growth remains stable. Rural consumption and robust government capital spending are supporting demand, while a normal monsoon is benefiting agriculture. Services and construction activity remain strong, although industrial performance is uneven, weighed down by electricity and mining.

The central bank retained its real GDP growth forecast for FY26 at 6.5%, with quarterly projections of 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4. For Q1 FY27, growth is projected at 6.6%, with risks broadly balanced.

On inflation, the RBI lowered its CPI forecast for FY26 to 3.1%, down from the earlier 3.7%. Quarterly inflation is now seen at 2.1% in Q2, 3.1% in Q3, and 4.4% in Q4. CPI inflation for Q1 FY27 is projected at 4.9%. The central bank noted that average inflation this year is expected to remain well below the target, largely due to easing food prices, although inflation may edge above the 4% mark from Q4 onwards.

The RBI highlighted that the full impact of the 100 basis points of rate cuts since February 2025 is still unfolding. Given the current macroeconomic conditions and external risks, the MPC decided to maintain the existing rate and continue with a neutral stance. It also signalled continued data monitoring to guide future policy moves.

The minutes of the meeting will be released on August 20, while the next MPC meeting is scheduled from September 29 to October 1.

Stocks in Spotlight:

Bharti Airtel rose 0.42%. The company has reported 103.3% rise in consolidated net profit to Rs 5,948 crore in Q1 FY26 from Rs 2,925 crore in Q1 FY25. Total revenues increased by 28.5% YoY to Rs 49,463 crore in the April ' June 2025 quarter. The growth was driven by strong momentum in both India and Africa.

Lupin shed 0.65%. The company's consolidated net profit jumped 52.13% to Rs 1,219.03 crore on an 11.78% increase in income from operations to Rs 6,163.75 crore in Q1 FY26 over Q1 FY25.

Container Corporation of India (CONCOR) fell 3.30%. The company reported 3.24% rise in consolidated net profit to Rs 266.54 crore on a 2.40% rise in revenue from operations to Rs 2,153.63 crore in Q1 FY26 over Q1 FY25

VRL Logistics tanked 3.47%. The company's standalone net profit surged 272.59% to Rs 50.04 crore in Q1 FY26, compared with Rs 13.43 crore posted in Q1 FY25. Revenue from operations rose 2.35% to Rs 744.33 crore in Q1 FY26, compared to Rs 727.20 crore in Q1 FY25.

S&S Power Switchgear hit an upper circuit of 2% after the company's wholly owned subsidiary S&S Power Switchgear Equipment (SSPSE) received the letter of awards (LoA) from Transrail Lighting.

Global Markets:

European markets opened higher on Wednesday, as investors took advantage of recent market weakness, shrugging off fresh U.S. tariff threats and focusing instead on a mixed set of corporate earnings.

Most Asian shares traded advanced as investors digested disappointing economic data and new tariff-related remarks from U.S. President Donald Trump.

'We're going to be announcing [tariffs] on semiconductors and chips, which is a separate category, because we want them made in the United States,' Trump said on Tuesday stateside, adding that he'll announce the new plan 'within the next week or so.'

On Wall Street, the three leading U.S. indexes finished lower Tuesday. The S&P 500 fell 0.49%, closing at 6,299.19, while the Nasdaq Composite slid 0.65% to end at 20,916.55. The Dow Jones Industrial Average moved 61.90 points lower, or 0.14%, to settle at 44,111.74.

U.S. services sector activity unexpectedly flatlined in July, data showed on Tuesday. The Institute for Supply Management (ISM) said on Tuesday its nonmanufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June. The data indicated that the employment had weakened further and input costs climbed by the most in nearly three years, underscoring the impact from President Donald Trump's tariff policy.

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