Sensex slips 215 points, Nifty ends below 16,250; Reliance Industries top drag

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After opening with mild gains benchmark equity indices came under pressure in afternoon trade on profit-booking post policy announcement by the RBI. Sensex ended 215 points or 0.39% lower at 54,277, while Nifty 50 settled at 16,238, down 56 points or 0.35%.

“Following a flat opening, the domestic market fell into the red as profit booking was witnessed in key sectors like Banking after the announcement of RBI monetary policy. Negative cues from Asian markets also added pressure on the domestic market. The policy was in line with market expectations, RBI continued to advance its super-easy monetary policy keeping its focus on economic recovery. On the side-line, the CPI forecast was increased to 5.7% from 5.1% for FY22. High global inflation has started to impact other emerging markets’ monetary policy & currencies, some have increased rates while others are planning to increase the rates in the future,” said Vinod Nair, Head of Research at Geojit Financial Services.

Top gainers & losers

Sectoral strand

Sectoral indices on NSE ended mixed. Nifty IT, Nifty Auto and Nifty Metal indices gained as much as 0.30% each. On the downside, Nifty Realty lost 0.96%, while the Nifty Pharma lost 0.43%. Nifty FMCG and Nifty Bank were down 0.09% and 0.07%, respectively.

Broader market

The broader bucked the trend in benchmark indices and ended with gains. BSE MidCap index ended flat with mild gains of 0.23% at 23,204 whereas the BSE SmallCap index settled higher at 26,805 up around 0.28%.

Overall market breadth remained positive as 1,824 shares advanced compared to 1,390 declined while 115 remained unchanged.

RBI MPC outcome

The Reserve Bank of India (RBI) kept the policy repo rate unchanged at 4% while maintaining its accommodative stance after the conclusion of the Monetary Policy Committee (MPC) meeting today, 6 August 2021.

RBI’s MPC began its bi-monthly monetary policy deliberations on Wednesday, 4 August 2021. Following the meet, RBI on Friday (6 August 2021) kept the benchmark interest rate unchanged amid COVID-19 uncertainty. Repo rate (lending rate) will continue at 4% and reverse repo rate (RBI’s borrowing rate) at 3.35%.

MPC sees CPI inflation at 5.7% in 2021-22 as against 5.1% projected earlier. The CPI inflation is expected to be 5.9% in Q2 FY22, 5.3% in Q3 FY22, 5.8% in Q4 FY22. The CPI inflation is projected to be at 5.1% in Q1 FY23. GDP growth is projected at 9.5% in Financial Year 2021-22.

New listing

Shares of Glenmark Life Sciences closed at Rs 748.20 at a premium of 3.92% as compared to the issue of Rs 720 apiece. The stock got listed at Rs 751.10, a premium of 4.32% to the initial public offer (IPO) price. So far, the stock has hit a high of Rs 799.95 and a low of Rs 737.35 per share.

Global markets

European markets were muted across the board on Friday morning, 6 August 2021 as investors monitored a fresh round of corporate earnings and the global spread of the delta COVID-19 variant. The German industrial output fell unexpectedly by 1.3% in June 2021, its second consecutive monthly decline, according to the Federal Statistics Office.

The Bank of England on Thursday left its monetary policy unchanged, but warned of a more pronounced period of above-target inflation in the near term.

Asian stocks traded mixed on Friday as investors await the release of a closely watched US jobs report.