The key equity indices reversed gains and slipped into the negative terrain in the mid-afternoon trade. The Nifty traded below the 17,400 mark after hitting day's high at 17,474.40 in the mid- morning trade. IT, bank and FMCG stocks were in demand while auto, consumer durables, and oil & gas stocks were under pressure.

At 14:30 IST, the barometer index, the S&P BSE Sensex, was down 44.19 points or 0.08% to 58,254.61. The Nifty 50 index declined 7.65 points or 0.17% to 17,352.45.

In the broader market, the S&P BSE Mid-Cap index shed 0.09% while the S&P BSE Small-Cap index added 0.22%.

The market breadth was positive. On the BSE, 1,846 shares rose and 1,450 shares fell. A total of 166 shares were unchanged.

Economy:

On the basis of an assessment of the current and evolving macroeconomic situation, the RBI's Monetary Policy Committee (MPC) at its meeting today (5 August 2022) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40% with immediate effect.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15% and the marginal standing facility (MSF) rate and the Bank Rate to 5.65%.

The MPC has retained the real GDP growth projection for the ongoing financial year 2022-23 at 7.2% and the quarterly growth forecast figures in its policy outcome on Friday.

The committee has also maintained its retail inflation projection for the current financial year at 6.7%, which was revised from 5.7% in the preceding monetary policy review in June.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

RBI Governor Shaktikanta Das, while delivering the outcome of the bi-monthly policy meet, said, Headline inflation has recently flattened and the supply outlook is improving, helped by some easing of global supply constraints.”

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose to 7.302 as compared with 7.157 at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 79.1550, compared with its close of 79.40 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement declined 0.29% to Rs 52,012.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, added 0.24 % to 105.94.

In the commodities market, Brent crude for October 2022 settlement rose 35 cents or 0.37% at $94.47 a barrel.

Buzzing Index:

The Nifty Auto index declined 0.93% to 12,825.80. The index rose 0.20% in past trading session.

Balkrishna Industries (down 7.13%), Sona BLW Precision Forgings (down 2.01%), Mahindra & Mahindra (down 1.53%), Eicher Motors (down 1.35%), Maruti Suzuki India (down 1.14%), Hero MotoCorp (down 1.05%), Bosch (down 0.4%), Tata Motors (down 0.26%), Bajaj Auto (down 0.15%) and Bharat Forge (down 0.09%) edged lower.

On the other hand, Tube Investments of India (up 6.52%), TVS Motor Company (up 1.66%) and MRF (up 0.36%) advanced.

Mahindra & Mahindra (M&M) fell 1.60%. The automobile major reported 66.9% rise in standalone net profit to Rs 1,430 crore on a 66.7% jump in revenue to Rs 19,613 crore in Q1 FY23 over Q1 FY22. While the revenue from the Auto segment was Rs 12,306 crore (up 103.4% YoY), Farm Equipment Sector (FES) revenue was Rs 6,689 crore (up 25.8% YoY) in Q1 FY23. Total Vehicles sold in Q1 FY23 was 1,49,803 units, up 74% YoY. Total Tractors sold rose by 18% YoY to 1,17,413 units during the period under review.

Earnings Impact:

LIC Housing Finance gained 1.57% after the company's net profit jumped six times to Rs 925.48 crore in Q1 FY23 from Rs 153.44 crore in Q1 FY22. Revenue from operations rose by 8.8% YoY during the quarter to Rs 5,285.46 crore. Net interest income improved by 26% to Rs 1610.19 crore in the quarter ended 30 June 2022. Net interest margin (NIM) for the quarter stood at 2.54 % as against 2.20 % for Q1 FY22.

Blue Star shed 0.61%. The company's net profit surged to Rs 74.25 crore in Q1 FY23 from Rs 12.69 crore recorded in Q1 FY22. Consolidated net sales climbed 87.3% to Rs 1,970.32 crore in Q1 FY23 as against Rs 1,052.04 crore posted in the corresponding quarter previous year.

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