Key gauges end lower ahead of RBI policy

Indian equity benchmarks ended lower on Tuesday following selling in Oil & Gas, Energy and FMCG shares ahead of the Reserve Bank's monetary policy announcement on August 6. Investor sentiments were further dampened after US President Donald Trump threatened to impose higher tariffs on India over its purchases of Russian oil. 

Some of the important factors in today’s trade: 

FIIs outflows continue to weigh on market confidence: Foreign Institutional Investors (FIIs) remained net sellers on Monday, offloading equities worth Rs 2,566.51 crore, according to exchange data. 

Rupee falls against US dollar amid trade tensions: Indian rupee depreciated against the US dollar, as risk-off sentiment deepened after US President Donald Trump renewed his threat to raise tariffs on Indian goods over New Delhi's continued purchases of Russian oil. 

25% import duty by Trump could lead to 30% decline in India's exports to America this fiscal: The Global Trade Research Initiative (GTRI) has said that the additional 25 per cent import duty announced by US President Donald Trump on Indian goods could lead to a 30 per cent decline at $60.6 billion in India's exports to America this fiscal (FY26) from $86.5 billion in FY25. 

India services growth hits 11-month high: The Indian services sector growth touched an 11 month high in July, supported by a pickup in new exports orders and sharp rise in overall sales. The seasonally adjusted HSBC India Services PMI Business Activity Index was at 60.5 in July, little-changed from 60.4 in June. 

Aviation stocks in focus: The global airlines' grouping International Airport Transport Association (IATA) report showed that India emerged as the world's fifth biggest aviation market, handling 211 million passengers, while Mumbai-Delhi was one of the busiest airport pairs in 2024. 

Global front: European markets were trading higher as investors digested a slew of earnings updates and held onto hopes that the U.S. Federal Reserve may soon pivot to monetary easing. Asian markets ended in green, after a Federal Reserve official said the time is nearing for rate cuts. 

Finally, the BSE Sensex fell 308.47 points or 0.38% to 80,710.25 and the CNX Nifty was down by 73.20 points or 0.30% to 24,649.55.   

The BSE Sensex touched high and low of 81,010.49 and 80,554.40 respectively. There were 16 stocks advancing against 13 stocks declining, while 1 stock remained unchanged on the index. 

The broader indices ended in red; the BSE Mid cap index fell 0.14%, while Small cap index was down by 0.27%.

The top gaining sectoral indices on the BSE were Auto up by 0.38%, Power up by 0.32%, Capital Goods up by 0.29%, Basic Materials up by 0.27% and Industrials up by 0.18%, while Oil & Gas down by 0.96%, Energy down by 0.74%, FMCG down by 0.61%, IT down by 0.52% and Realty down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 2.16%, Maruti Suzuki up by 1.30%, Trent up by 1.22%, Bharti Airtel up by 0.77% and Bajaj Finance up by 0.69%. On the flip side, Adani Ports &SEZ down by 2.38%, Reliance Industries down by 1.40%, Infosys down by 1.39%, ICICI Bank down by 1.19% and Eternal down by 1.00% were the top losers.

Meanwhile, India’s services sector continued a strong growth momentum in the month of July, as ongoing improvements in demand for Indian services continued to underpin growth of total new orders, international sales and output. Although the upturn added pressure on firms' capacity, hiring moderated. July's increase in employment was the slowest in 15 months, despite strengthening business confidence. Meanwhile, input costs and output charges rose at faster rates than in June.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index grew to 60.5 in July from 60.4 in June. The rate of expansion was the best seen since August 2024. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 61.1 in July as against 61.0 in June, indicating a sharp rate of expansion that was the quickest since April 2024.

The report noted that advertising, demand buoyancy and new client onboarding all underpinned the latest upturn in new orders. July's rise was sharp and the second-quickest in nearly a year (behind June). Indian service providers also welcomed a stronger improvement in international demand for their services. They secured new work from Asia, Canada, Europe, the UAE and the US. The rate of expansion in external sales was sharp and the second-fastest in a year (behind May).

The CNX Nifty traded in a range of 24,733.10 and 24,590.30. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 2.02%, Indusind Bank up by 1.66%, SBI Life Insurance up by 1.56%, Maruti Suzuki up by 1.44% and Coal India up by 1.36%. On the flip side, Adani Ports &SEZ down by 1.94%, Reliance Industries down by 1.52%, Infosys down by 1.38%, Adani Enterprises down by 1.29% and ICICI Bank down by 1.24% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 40.34 points or 0.44 to 9,168.64, France’s CAC rose 16.69 points or 0.22 to 7,648.70 and Germany’s DAX gained 184.01 points or 0.77 to 23,941.70.

Asian markets finished in green on Tuesday on optimism over Federal Reserve interest rate cut bets. Positive economic indicators and robust corporate earnings boosted investor sentiments. Weaker dollar and rally in technological sector stocks after Palantir's strong performance also buoyed the local indices. South Korea's KOSPI index surged the most among Asian indices, marking its highest level since August 2021. Proactive government policies aimed at stimulating economic growth have played a crucial role in enhancing market sentiments of South Korea.