Indian equity indices closed in the green on Wednesday, supported by domestic institutional buying. The Reserve Bank of India maintained the repo rate at 5.25% and lowered its FY27 inflation projection to 5%. Investors are weighing these policy developments against current market volatility and sectoral rotation.
Indian stock markets ended the trading session on a positive note on Wednesday, August 5, 2026. The BSE Sensex closed at 78,581.00, gaining 152.05 points or 0.19%, while the NSE Nifty 50 settled at 24,624.65, up 9.75 points or 0.04%. The indices saw a late-session lift, partly influenced by the recently introduced Closing Auction Session (CAS) mechanism for F&O-eligible stocks.
RBI Monetary Policy Outlook
The highlight of the day was the Reserve Bank of India’s (RBI) Monetary Policy Committee announcement. The central bank maintained the key repo rate at 5.25% and kept its policy stance neutral. In a move that cheered market participants, the RBI lowered its inflation forecast for the financial year 2027 to 5%, down from the previous projection of 5.1%. Additionally, the central bank showed optimism regarding the domestic economy by marginally upgrading its FY27 GDP growth forecast to 6.7%, up from 6.6%.
Institutional Flows and Sector Performance
Market sentiment was bolstered by strong domestic institutional investor (DII) participation. On a provisional basis, DIIs were net buyers of equities worth ₹2,883.17 crore. This buying interest helped counterbalance selling pressure from foreign institutional investors (FIIs), who offloaded equities worth ₹943.42 crore during the session.
Sectoral performance remained mixed throughout the day, showing clear divergence in investor appetite. Realty and automobile stocks outperformed, attracting buying interest. In contrast, sectors such as banking, FMCG, and pharma faced selling pressure, highlighting a rotation in portfolio preferences rather than a broad-based rally.
What Investors Are Watching
The market continues to balance domestic economic health with external risks, including fluctuations in crude oil prices and ongoing geopolitical uncertainties in West Asia. The RBI's focus on maintaining a neutral stance while keeping an eye on inflation suggests a cautious but stable approach to economic management.
Investors are now turning their attention to upcoming corporate developments. Several companies, including Biocon, Cummins India, PB Fintech, Navin Fluorine International, JK Lakshmi Cement, Neuland Laboratories, and Aster DM Healthcare, are scheduled to report their June-quarter earnings. Tracking these results, along with global cues and any further updates on the CAS mechanism, will be key for market participants in the coming sessions.