Investor caution was further reinforced after the Reserve Bank of India (RBI) kept the benchmark repo rate unchanged at 5.25% while retaining its neutral monetary policy stance.

Although the RBI expressed confidence in the domestic economy by raising its FY27 GDP growth forecast to 6.7% and lowering its inflation projection to 5.0%, the positive macroeconomic outlook failed to lift market sentiment. Instead, investors remained focused on near-term risks, including heightened market volatility, geopolitical developments, and uncertainty surrounding the impact of the new CAS framework on trading dynamics.

Going forward, market participants are expected to closely monitor the impact of the NSE's Closing Auction Session (CAS) on market liquidity and price discovery, the progress of the ongoing corporate earnings season, and management commentary on sector-specific demand trends. Global developments, including the evolving U.S.-Iran conflict, movements in crude oil prices, energy market dynamics, and other international macroeconomic cues, will also remain key drivers of market sentiment in the near term.

In the week ended on Friday, 7 August 2026, the S&P BSE Sensex shed 139.86 points or 0.18% to settle at 78,499.17. The Nifty 50 index declined 203.65 points or 0.82% to settle at 24,570.65. The BSE 150 Mid-Cap index gained 0.96% to close at 17,240.08. The BSE 250 Small-Cap jumped 1.23% to end at 7,240.15.

Weekly Index Movement:

The benchmark indices ended higher on Monday, extending gains for the fourth consecutive trading session. The rally was driven by a sharp decline in Brent crude oil prices amid easing geopolitical tensions in the Middle East. The S&P BSE Sensex jumped 544.39 points or 0.70% to 78,639.03. The Nifty 50 index rose 390.70 points or 1.60% to 24,774.30. In four consecutive sessions, the Sensex rallied 2.44% while the Nifty jumped 3.29%.

The benchmark indices ended lower on Tuesday, snapping a four-session winning streak as investors booked profits ahead of the Reserve Bank of India's monetary policy decision due on Wednesday. Sentiment remained cautious amid the weekly expiry of Nifty 50 derivatives contracts and increased volatility following the rollout of the NSE's new Closing Auction Session (CAS). The S&P BSE Sensex declined 210.08 points or 0.27% to 78,428.95. The Nifty 50 index fell 159.40 points or 0.64% to 24,614.90. In the past four trading sessions, the Sensex jumped 2.44% and Nifty climbed 3.29%.

The benchmark indices ended higher on Wednesday after the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25% and retained its neutral policy stance. Investor sentiment was also supported by the RBI raising its FY27 GDP growth forecast to 6.7% and lowering its inflation projection to 5%. The S&P BSE Sensex jumped 152.05 points or 0.19% to 78,581. The Nifty 50 index rose 9.75 points or 0.04% to 24,624.65.

The benchmark indices ended higher in a volatile session on Thursday, extending their gains for a second consecutive session. Sentiment was supported by hopes of a diplomatic breakthrough in the Middle East and a better-than-expected June-quarter earnings season. The S&P BSE Sensex, jumped 373.76 points or 0.48% to 78,954.76. The Nifty 50 index rose 11.35 points or 0.05% to 24,636. In two consecutive sessions, the Sensex rose 1.33% while the Nifty climbed 1.29%.

The key equity indices ended with modest losses on Friday, snapping a two-session winning streak. The benchmarks remained under pressure throughout the session as selling in heavyweight financial stocks outweighed gains in information technology shares. Nifty closed below the 24,600 level. The S&P BSE Sensex declined 455.59 points or 0.58% to 78,499.17. The Nifty 50 index lost 65.35 points or 0.27% to 24,570.65. Over the last two trading sessions, the Sensex gained 0.67%, while the Nifty advanced 0.09%.

CAS for F&O stocks :

Effective 3 August 2026, the Closing Auction Session (CAS) has been introduced for stocks in the F&O segment, revising market closing timings while keeping the opening time unchanged. Continuous trading in F&O stocks will now end at 3:15 pm, followed by the closing auction session, while non-F&O stocks will continue to trade until 3:30 pm. Trading in index and stock futures and options will conclude at 3:40 pm. The new mechanism is aimed at enhancing price discovery for the official closing price, reducing end-of-day volatility, and facilitating transparent execution of large institutional orders.

RBI MPC Outcome:

The Reserve Bank of India (RBI) kept the policy repo rate unchanged at 5.25% at the conclusion of its three-day Monetary Policy Committee (MPC) meeting held from 3 to 5 August 2026.

The six-member MPC unanimously voted to keep the repo rate unchanged. Accordingly, the Standing Deposit Facility (SDF) rate remains at 5.00%, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.50%. The committee also retained its neutral policy stance.

The RBI revised its FY27 real GDP growth forecast upward to 6.7% from 6.6% projected in the previous policy review. Growth is projected at 7.0% in Q1, 6.4% in Q2, 6.5% in Q3 and 6.8% in Q4, with Q1 FY28 growth estimated at 7.3%. The central bank said domestic demand remains resilient, supported by strong private consumption, investment activity, services exports and government infrastructure spending.

The RBI, however, cautioned that global uncertainty, volatile energy prices, supply chain pressures, geopolitical tensions, and deficient and uneven monsoon conditions due to El Niño continue to pose risks to the growth outlook.

On inflation, the central bank projected CPI inflation at 5.0% for FY27, lower than its earlier estimate of 5.1%. Inflation is projected at 4.7% in Q2, 5.9% in Q3 and 5.5% in Q4, while Q1 FY28 inflation is estimated at 5.3%. Core inflation is projected at 4.3% for FY27.

The RBI said headline inflation is expected to rise mainly because of food and fuel-related supply-side pressures, while core inflation remains moderate. It added that uncertainty over monsoon conditions, global crude oil prices, geopolitical developments and global trade policies warrants caution before any policy action.

The central bank said it will continue to closely monitor incoming data and remain focused on aligning inflation with its medium-term target while supporting economic growth.

Economy:

India's services sector continued to expand in July, although growth slowed sharply, according to the latest HSBC India Services PMI survey. The Business Activity Index fell to 53.3 from 57.4 in June, marking the weakest expansion in 53 months while remaining above the 50-point threshold that separates growth from contraction.

At the broader level, the HSBC India Composite PMI Output Index declined to 54.3 from 57.1, signalling the slowest pace of private-sector expansion since March 2022, even as employment continued to rise and business confidence remained positive despite easing to a seven-month low.

Monthly Auto Sales:

Tata Motors jumped 3.71%. The company has reported a 37% year-on-year (YoY) increase in total commercial vehicle (CV) sales to 39,641 units in July 2026, compared with 28,956 units sold in the same month last year.

Bajaj Auto advanced 1.06%. The company reported a 30% increase in total auto sales to 4,74,677 units in July 2026, compared with 3,66,000 units sold in July 2025.

SML Mahindra slipped 2.34%. The company said that it had sold 1,603 units in July 2026, registering a growth of 12% from 1,427 units sold in the same period last year.

Stocks in Spotlight:

Bharti Airtel shed 0.62%. The telecom major reported a 41.63% year-on-year (YoY) jump in consolidated net profit to Rs 8,424.29 crore for the quarter ended 30 June 2026 (Q1 FY27) Consolidated revenue from operations increased 18.35% YoY to Rs 58,539.1 crore aided by robust growth across its India and Africa operations.

Kalyan Jewellers India declined 0.45%. The company reported a 32.02% increase in consolidated net profit to Rs 348.66 crore on a 45.68% rise in revenue from operations to Rs 10,588.92 crore in Q1 FY27 compared with Q1 FY26.

Oil and Natural Gas Corporation (ONGC) fell 1.98%. The company reported a 112.3% jump in standalone net profit to Rs 17,033.81 crore for the quarter ended 30 June 2026 (Q1 FY27), compared with Rs 8,024.23 crore in the corresponding quarter of the previous fiscal. Revenue from operations jumped 45.2% YoY to Rs 46,460.45 crore in the quarter ended 30 June 2026.

Zee Entertainment Enterprises (ZEEL) plunged 18.58%. The Securities and Exchange Board of India (Sebi) passed its final order in the matter relating to the unauthorised pledge of the company's Hyderabad land. Sebi has restrained ZEEL from accessing the securities market for two months and imposed a penalty of Rs 30 lakh. The regulator also barred founder Subhash Chandra and managing director and chief executive officer Punit Goenka from the securities market for 12 months each. It imposed penalties of Rs 60 lakh on Chandra and Rs 58 lakh on Goenka.

Jupiter Life Line Hospitals tumbled 3.67%. The multi-specialty hospital operator reported a decline in earnings for the quarter ended 30 June 2026, as expansion-related costs and higher finance expenses weighed on profitability. The company's consolidated net profit declined 14.59% year-on-year (YoY) to Rs 37.48 crore in Q1 FY27, compared with Rs 43.88 crore in the corresponding quarter last year. Revenue from operations, however, rose 16.44% YoY to Rs 410.98 crore, reflecting sustained patient demand and improved realizations.

Restaurant Brands Asia surged 44.94%. The company reporting a sharp improvement in operating performance for Q1 FY27. The company reported a consolidated net loss of Rs 33 crore in Q1 FY27, narrowing from a loss of Rs 45.40 crore in Q1 FY26. Revenue from operations increased 17.9% YoY to Rs 822.60 crore in the quarter ended 30 June 2026.

Marico shed 0.56%. The company reported a 25% YoY jump in consolidated net profit to Rs 630 crore in Q1 FY27, driven by strong domestic volume growth and robust international business performance. Revenue from operations increased 23% YoY to Rs 3,957 crore in Q1 FY27, supported by 11% underlying volume growth in the India business and 15% constant currency growth in the international business.

State Bank of India (SBI) added 6.74%. The bank’s standalone net profit jumped 10.23% to Rs 21,121.22 crore in the quarter ended 30th June 2026, compared with Rs 19,160.44 crore recorded in the quarter ended 30th June 2025. Total income rose 6.26% YoY to Rs 1,43,819.15 crore,

Global Markets:

The S&P Global UK Services PMI rose to 52.1 in July from 48.8 in June, returning to expansion territory for the first time in three months, although it remained below its long-run average of 54.2. The Composite PMI also improved to 52.2.

In the eurozone, producer prices fell 0.3% month-on-month in June, marking the first decline in four months as lower energy prices offset increases in other categories. On an annual basis, producer price inflation eased to 4.6% from 5.9% in May.

China's exports grew more than expected in July, although the pace moderated from June's robust expansion, supported by strong global demand for high-tech components.

Official customs data released on Friday showed that exports rose 23% year-on-year in U.S. dollar terms in July, easing from 27% growth in June—the fastest pace since October 2021. Imports increased 27.5% from a year earlier, compared with a 36% jump in June, which had marked the strongest growth in five years.

China's trade surplus stood at $112.5 billion in July, narrowing from $125.6 billion recorded in June.