Equities Edge Higher After RBI Pause; Rupee, Bonds Gain

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

istock.com

Representational Image

By Tresha Dias

August 5, 2026 at 12:59 PM IST

Indian equities ended marginally higher on Wednesday after the Reserve Bank of India kept the policy repo rate unchanged at 5.25% and retained its neutral stance, while raising its FY27 growth forecast and trimming its inflation projection, broadly in line with market expectations.

The Sensex rose 152.05 points, or 0.19%, to 78,581.00, while the Nifty50 gained 9.75 points, or 0.04%, to close above the 24,600 mark.

The broader market outperformed the benchmark indices, with the BSE MidCap 150 and SmallCap 250 indices rising 0.34% and 0.70%, respectively, as investors welcomed the RBI's improved macroeconomic outlook despite signs of slowing economic momentum. The central bank raised its FY27 GDP growth forecast to 6.7% from 6.6% and lowered its inflation projection to 5.0% from 5.1%, while warning that volatile crude oil prices and the uneven impact of El Niño remained key risks to inflation.

Investor sentiment was also supported by hopes of easing geopolitical tensions after crude oil prices remained below last week's highs, although weaker-than-expected July services PMI data underscored a moderation in domestic economic activity.

The Indian rupee closed at a one-month high of 95.1175 per dollar today, supported by a sharp decline in crude oil prices and sustained foreign exchange inflows, although the Reserve Bank of India's widely expected decision to leave interest rates unchanged prompted the currency to surrender part of its early gains.

The yield on the benchmark 6.94%, 2036 government bond ended at 6.7722%, compared with 6.8152% at the previous close. The market remained volatile after the policy announcement as crude oil prices fluctuated, although the MPC outcome itself failed to provide any fresh directional cues. State-owned banks were seen selling government securities at current levels, trimming their bond holdings at a profit.

Top Movers of the Day

UltraTech Cement shares gained 1.16% to ₹12,190, buoyed by strong Q1 results. The company was also in focus after raising 50 billion rupees through its largest-ever domestic rupee bond issuance across three tranches to fund capacity expansion to over 240 million tonnes per annum. Meanwhile, it continued to diversify its portfolio with an 18-billion-rupee investment in its wires and cables business, scheduled for commercial launch by December 2026.

Canara Bank grew 0.39% to ₹128.50 showing mild recovery supported by a board-approved 8,500-crore-rupee capital-raising plan for FY27 and steady FCNR(B) dollar deposit inflows of over $1 billion. The gains in the stock were despite margin pressures and a muted sector-wide performance of banking stocks.

NTPC shares catapulted 1.77% to ₹348 as sentiment stayed positive on strong FY26 earnings, record capacity additions and the company’s clean-energy expansion plans.

Mahindra & Mahindra shares advanced 0.76% to ₹3,359 driven by strong July 2026 sales, which grew 26%, and strong Q1 FY27 earnings revenue growth of 23%. The upward trajectory was further fueled by robust SUV demand and improving rural sentiment linked to a favorable monsoon recovery. The company's recent strategic decision to streamline operations by approving a 525 crore rupees slump sale of its truck and bus division to subsidiary SML Mahindra has boosted investor confidence.

IndiGo shares grew 1.14% to ₹5,419 on falling crude oil prices, which improved the outlook for airline costs and lifted the stock to an intra-day high.

Trent shares rose 0.074% to ₹3,110. The company is scheduled to release its Q1 FY27 financial results on August 6, 2026. Ahead of the announcement, the stock showed mild recovery and stability following earlier corrections tied to moderated revenue growth expectations.

L&T shares rose 1.43% to ₹4,047 as the broader market traded higher, with infrastructure and capital goods names benefiting from positive sentiment.

State Bank of India gained 1.13% to ₹1,054.40 during the session. SBI outperformed most lenders after the RBI kept the repo rate unchanged, with investors viewing the stable policy environment as supportive for the banking sector and recent optimism around the lender’s improving profitability and asset quality.

TCS shares fell 1.86% to ₹2,414.20 driven by profit booking, weak global cues and concerns about AI-led disruption to traditional software services.

ICICI Bank shares slipped 0.76% to ₹1,443.60. The stock underperformed as investors remained cautious toward large private lenders after the RBI policy announcement and amid concerns over margin pressures in the banking sector.

IndusInd Bank fell 0.83% to ₹1,017.50, making it one of the weakest-performing major banking stocks today despite the broader market ending higher.

Axis Bank fell 0.54% to ₹1,255 as investors continued to assess the lender's June-quarter earnings, with pressure on net interest margins and softer fee income weighing on sentiment despite healthy loan growth and stable asset quality.

Futures & Options
The Nifty August 2026 futures contract settled at 24,637.00, a premium of 12.35 points to the Nifty 50 cash index, which rose 9.75 points, or 0.04%, to 24,624.65.

Market volatility eased marginally, with the NSE India VIX declining 0.79% to 12.09. HDFC Bank, BSE and Reliance Industries were the most actively traded individual stock futures contracts on the NSE. The August 2026 F&O series expires on Aug. 25, 2026.

Bonds
The yield on the benchmark 6.94%, 2036 government bond ended at 6.7722%, compared with 6.8152% at the previous close. The market remained volatile after the policy announcement as crude oil prices fluctuated, although the MPC outcome itself failed to provide any fresh directional cues. State-owned banks were seen selling government securities at current levels. State-owned banks trimmed their bond holdings at a profit, limiting gains.

Forex
The Indian rupeeclosed at a one-month high of 95.1175 per dollar today, supported by a sharp decline in crude oil prices and sustained foreign exchange inflows, although the Reserve Bank of India's widely expected decision to leave interest rates unchanged prompted the currency to surrender part of its early gains. The rupee opened 0.5% stronger at 94.92, its highest level since July 1, before paring gains to post its strongest close since July 7.

Brent crude had fallen more than 12% over the previous two sessions on hopes of a diplomatic breakthrough in the five-month US-Iran conflict, easing pressure on the oil-sensitive rupee. The earlier decline in crude prices, coupled with stronger foreign exchange inflows, helped the rupee extend its recovery, with the currency gaining 1.4% over the past eight trading sessions.

Crypto
The cryptocurrency market traded largely steady today, with Bitcoin and Ethereum posting modest gains as investors awaited fresh market catalysts.

Bitcoin traded near $64,088.72 today, holding above the $64,000 mark as investors assessed broader market sentiment. The world's largest cryptocurrency remained range-bound after recent volatility, with traders continuing to monitor ETF flows, Federal Reserve policy expectations and macroeconomic developments for fresh direction.

Ethereum traded near $1,869.71 today, extending modest gains while remaining below the key $1,900 level. The second-largest cryptocurrency tracked the broader market's cautious advance as investors looked for stronger catalysts to drive the next leg of the rally.

US Stock Futures
US stock futures rose today, extending gains as optimism over a potential resolution to the Iran war lifted risk appetite. Dow futures gained 146 points, or 0.27%, while S&P 500 futures advanced 0.37% and Nasdaq-100 futures rose 0.16%.

SpaceX shares fell 8% in pre-market trading after investors reacted negatively to the company's quarterly results, despite earnings beating expectations. The sell-off came as concerns over artificial intelligence spending overshadowed the earnings beat, weighing on sentiment toward the stock.

US Treasury
US Treasury note yields fell for the third consecutive session today, with the benchmark 10-year yield easing to around 4.60% as signs of progress in US-Iran negotiations over reopening the Strait of Hormuz weighed on oil prices and eased inflation concerns. The five-year note yield was steady at 4.33%, while markets trimmed expectations for a September Federal Reserve rate hike to around 57% from 67% a day earlier.

Qatar said an interim proposal had been prepared, while Washington and Tehran signalled progress in talks to reopen the Strait of Hormuz. US Treasury Secretary Scott Bessent also said an agreement could be reached as early as Tuesday or Wednesday. Investors are now awaiting a series of US labour market reports, including ADP's July private payrolls data, for further clues on the Federal Reserve's policy outlook.

Top News