Nifty below 24,600 level; PSU bank shares in demand

The key equity indices witnessed modest losses in afternoon trade. The Nifty traded a tad below the 24,600 level. PSU bank shares advanced after declining in the previous trading session.

At 14:30 IST, the barometer index, the S&P BSE Sensex, shed 82.85 points or 0.10% to 80,627.40. The Nifty 50 index fell 53.75 points or 0.22% to 24,595.80.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.92% and the S&P BSE Small-Cap index fell 1.06%.

The market breadth was weak. On the BSE, 1,302 shares rose and 2,673 shares fell. A total of 157 shares were unchanged.

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.

Buzzing Index:

The Nifty PSU Bank index rose 0.81% to 6,904.10. The index shed 0.15% in the past trading sessions.

Union Bank of India (up 2.67%), Canara Bank (up 1.81%), Bank of India (up 1.21%), Bank of Baroda (up 0.81%), State Bank of India (up 0.74%), Punjab National Bank (up 0.46%), Indian Bank (up 0.37%) and Central Bank of India (up 0.36%) advanced.

On the other hand, UCO Bank (down 1.59%), Bank of Maharashtra (down 0.94%) and Punjab & Sind Bank (down 0.63%) edged lower.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 1.19% to 6.399 from the previous close of 6.324.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 87.6550 compared with its close of 87.8800 during the previous trading session.

MCX Gold futures for 3 October 2025 settlement shed 0.51% to Rs 100,820.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.01% to 98.77.

The United States 10-year bond yield rose 0.86% to 4.243.

In the commodities market, Brent crude for October 2025 settlement added $1, or 1.48% to $68.64 a barrel.

Stocks in Spotlight:

Sandesh hit an upper circuit of 20% after reporting a 14.95% year-on-year rise in consolidated net profit at Rs 58.04 crore for Q1 June 2025, compared to Rs 50.49 crore a year ago. Net sales rose 6.82% to Rs 73.33 crore from Rs 68.65 crore in the corresponding period of the previous year.

Divis Laboratories slipped 4.75% after the pharma major's consolidated net profit declined 17.67% to Rs 545 crore in Q1 FY26 as against Rs 662 crore recorded in Q4 FY25. Revenue from operations also declined 6.79% quarter on quarter (QoQ) to Rs 2,410 crore for the quarter ended 30 June 2025.

Powered by Capital Market - Live News