Indian equity markets snapped their four-day winning streak on Tuesday, with the BSE Sensex falling 210.08 points to close at 78,428.95 and the Nifty 50 dropping 159.40 points to end at 24,614.90, settling below the crucial 24,650 level. The market decline came as investors grappled with new closing auction rules introduced by stock exchanges, which replaced the previous trading system with a new mechanism designed to improve price discovery and reduce volatility. Continuous trading for F&O stocks now ends at 3:15 pm, followed by a closing auction to determine the official closing price, with derivatives trading continuing until 3:40 pm. The Nifty settled 150 points above the 3:15 pm level, indicating that the auction mechanism was functioning as intended. In the past four trading sessions, the Sensex jumped 2.44% and Nifty climbed 3.29%, highlighting the recent rally's momentum before Tuesday's correction.
Sectoral sentiment remained broadly negative, with selling pressure visible across most market pockets. Oil & gas and FMCG stocks led the decline, while banking, FMCG, pharma and healthcare also traded weak. Metal and media shares bucked the trend, showing resilience amid the broader market weakness. Grasim Industries declined 3.74%, Reliance Industries fell 2.13%, and HDFC Bank dropped 1.46%, among the top losers. Market breadth remained negative as on the BSE, 2,108 shares rose and 2,128 shares fell, with 203 shares unchanged. The NSE's India VIX rose 1.86% to 12.15, reflecting increased volatility expectations. The broader market outperformed the frontline indices, with BSE 150 MidCap Index rising 0.03% and BSE 250 SmallCap Index adding 0.27%. Technically, the 24,750-24,780 zone remains the key resistance for the Nifty, while the 24,460-24,430 zone is expected to provide immediate support.
The Reserve Bank of India's three-day Monetary Policy Committee (MPC) meeting entered its second day on Tuesday, 4 August 2026, with RBI Governor Sanjay Malhotra scheduled to announce the policy decision on Wednesday, 5 August 2026. Market participants closely monitored the central bank's commentary on inflation, economic growth and the outlook for interest rates. Global markets showed mixed signals with Dow Jones futures rising 330 points, signalling a positive opening for Wall Street. European shares traded higher as signs of renewed diplomatic engagement between Washington and Tehran lifted investor sentiment, though Asian shares ended mostly higher amid cautious sentiment over geopolitical tensions in West Asia. Oil prices edged higher in Asian trade after US President Donald Trump said he had called off a planned attack on Iran as a goodwill gesture to support peace efforts, though Tehran has denied that any negotiations are under way.
LIC fell 8.68% after the Government of India launched an offer for sale (OFS) to pare its stake in the state-owned insurer, with the floor price fixed at ₹382 per share, representing a 10.85% discount to LIC's previous closing price. Ather Energy jumped 14.25% after reporting sharp improvement in Q1 FY27 performance, with net loss narrowing to ₹51.09 crore from ₹178.23 crore YoY and revenue surging 88.8% YoY to ₹1,216.92 crore. Great Eastern Shipping Company rose 2.47% after posting consolidated net profit of ₹1,308.84 crore, registering 159.43% YoY increase. Restaurant Brands Asia hit an upper limit of 20% after reporting consolidated net loss narrowing to ₹33 crore from ₹45.40 crore YoY. Best Agrolife zoomed 19.96% after consolidated net profit surged 104.07% to ₹40.65 crore.
The National Stock Exchange implemented the Closing Auction Session (CAS) for Futures & Options stocks from Monday, with continuous trading in F&O stocks concluding at 3:15 pm, followed by a closing auction to improve price discovery and reduce end-of-day volatility. Gold prices jumped by ₹682 to ₹1.43 lakh per 10 grams in futures trade on Tuesday, supported by firm global trends as investors awaited key US economic data. MCX Gold futures for 5 October 2026 settlement jumped 0.55% to ₹1,43,724. Brent crude for September 2026 settlement jumped $1.91 or 2.28% to $85.68 a barrel. The rupee edged higher against the dollar, hovering at 95.3300 compared with its close of 95.3700 during the previous trading session. India's 10-year benchmark bond yield shed 0.06% to 6.829% compared with the previous session close of 6.833.
