Indian equity markets end the day in red, after RBI keeps interest rate unchanged

Mumbai, August 6, 2025 — Indian equity markets ended the day in red today, 6th August 2025. Markets showed some disappointment with the central bank’s decision to keep its benchmark interest rate unchanged. Nifty 50 ended the day, down by 75.35 points or 0.31%. Sensex ended the day, down by 166.26 points or 0.21%

Market breadth also stayed in the negative territory with more index constituents on the downside. Intraday volatility was in evidence as indices moved within a tight bandwidth, indicating growing risk aversity among traders ahead of coming global data releases.

Top  Gainers & losers

Weakness in the technology and pharma space was the largest drag on benchmark performance. Market leaders such as Infosys, TCS, and HCL Technologies experienced continuous selling pressure, possibly reflecting fears of slow global demand recovery and a rising rupee. Sun Pharma also declined, perhaps responding to margin concerns highlighted in recent sector reports.

Heavyweights like Bajaj Finance and UltraTech Cement contributed to the negativity, while ITC and Tata Steel saw marginal falls.

Conversely, some pockets offered cushioning. Asian Paints and Mahindra & Mahindra topped the list of gainers on the Sensex, indicating strength in the auto and consumption space. Bharat Electronics (BEL) and Adani Ports were favored by investors in a backdrop of steady earnings visibility. Of the financials, SBI and HDFC Bank were relatively better placed, indicating banking fundamentals continue to underpin market breadth even in falling sessions.

RBI Leaves Repo Rate Unchanged, Updates Inflation Estimate

In its third bi-monthly policy review for FY26, the RBI left the repo rate unchanged at 5.5%, preferring to hold back after rate cuts this year. The central bank adopted a cautious approach, citing heightened global uncertainties, such as recent trends in US tariff regimes and weak supply chain dynamics.

Notably, the RBI also lowered its inflation forecast for FY26 to 3.1%, down from 3.7% previously. The moderation reflects faith in home market price stability in spite of rising energy prices abroad. On the other hand, GDP growth forecasts stand at 6.5% unchanged, reflecting optimism of the central bank regarding India’s consumption-driven recovery remaining on track.

Policy stance is indicative of the fact that even though rate reductions might have been put on hold, RBI is maintaining liquidity supportive and data-dependent for the next move.

Global Market Snapshot

Overseas leads were mixed. Asian markets were in risk-off mood with no fresh triggers. Japan’s Nikkei 225 and China’s Shanghai Composite closed in positive, whereas Korea’s Kospi was flat in a wait-and-watch mode in anticipation of US job market and inflation numbers.

European indices started the day in the green on the back of robust earnings reports and stable macro numbers. On Wall Street, US equities closed lower in the last session following renewed fears over protectionist trade policy weighing on sentiment.

Investors worldwide are considering the spillovers of a more divided trade environment, particularly after recent US-China tariff negotiations collapsed without agreement.

Crude Oil and FII Activity

Oil prices edged higher, supported by a further reduction in production from OPEC+ and the improvement in the outlook in the global supply side. Brent crude futures advanced more than 1.6% to around USD 68.70 a barrel, which poses additional pressure on import-dependent economies like India.

Institutional flows took a divergent route. FIIs became net sellers, selling an additional ₹22.48 crore worth of equities on Tuesday. Perhaps, this was due to international uncertainties and profit booking. On the other hand, DIIs were optimistic as well; infusing over ₹3,800 crore into equities. Thereby manifesting that every domestic investor is hopeful about the Indian structural growth story.

Previous Session Recap

Tuesday again witnessed an across-the-board selling spree as the Sensex crashed to below 300 points and the Nifty dived below 24,650. Global headwinds along with muted corporate earnings guidance in a few sectors kept the market on its tenterhooks.

Note: Investors are monitoring the market’s ability to hold above key support levels, especially Nifty’s 24,500 zone, amid global headwinds and sectoral volatility.

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