The Bear-forces are back, markets lost around 0.40% in benchmark indices led by Bank Nifty, while other sectoral performances varied.
The Indian market closed lower for the second session in succession on Wednesday, August 6, 2025, as caution gripped the market in the wake of the Reserve Bank of India's (RBI) monetary policy halt and fresh tariff threats from the United States.
The market began flat as it awaited the RBI's decision but fell into the red following the policy outcome, extending the losses as global cues went south and the US ramped up its tariff war threats against India owing to continued oil imports from Russia.
1. RBI Policy Decision- The RBI left the repo rate unchanged at 5.5%, as expected. The Monetary Policy Committee (MPC) maintained a neutral position at 4% steady core inflation and GDP forecast at 6.6% for FY26. The action is considered to be rate-friendly for rate-sensitive industries such as real estate, but traders remained unfazed with no dovish signal.
2. Global Trade Uncertainties- US President Donald Trump's threat of potential steep tariffs on Indian imports shook market sentiment. Pharma and healthcare stocks—primary exports to the US—were among the worst affected, with sectoral indices falling more than 1% each.
3. Earnings & Stock Movements- Bharti Airtel saw robust Q1 numbers, underpinning telecom sentiment, while Adani Ports saw a strong revenue and profit jump for the same quarter. IT stocks Tech Mahindra, Infosys, and Bajaj Finance were poor performers, falling 1% to 2%. PSU banks defied the trend, recording gains based on stable outlook and firm balance sheets.
Wider indices such as the Nifty MidCap100 and Nifty SmallCap100 trailed, declining by about 0.7% each. Foreign Institutional Investors (FIIs) continued to offload, while Domestic Institutional Investors (DIIs) came to the rescue with net buying for the 21st consecutive session.
With international uncertainties and domestic policy in wait-and-watch mode, traders are likely to be guarded. Major Q1 numbers, from Bajaj Auto, Hero MotoCorp, and others are scheduled, and global news on tariffs will keep near-term sentiment going.
The day witnessed a defensive sentiment on Dalal Street as policy and politics took centre stage over economic advancement. Investors now look forward to earnings from companies and await resolution on the global trade front.
