RBI Policy Stability and Strong DII Support Keep Indian Markets Afloat; FIIs Turn Net Sellers — August 5, 2026

Market Snapshot

The Indian stock market witnessed a day of range-bound trading but managed to close in the green following the Reserve Bank of India's (RBI) monetary policy announcement. The BSE Sensex gained 152.05 points, or 0.19%, to settle at 78,581.00, while the NSE Nifty 50 edged up by 9.75 points, or 0.04%, to close at 24,624.65.

The market opened on a strong note, tracking positive global cues and a dip in Brent crude prices below the $80 per barrel mark. However, intraday volatility and profit-booking in heavyweight IT and FMCG stocks limited the gains. The broader market outperformed the front liners, with the Nifty Midcap and Smallcap indices ending 0.18% and 0.7% higher, respectively.

Institutional Flows: Cash Market

The provisional data for August 05, 2026, revealed a divergence in institutional sentiment. Domestic institutions continued to show immense faith in the India growth story, whereas foreign investors turned cautious.

• Foreign Institutional Investors (FIIs) were net sellers in the cash segment, offloading equities worth ₹943.42 crore.
• Domestic Institutional Investors (DIIs) remained the primary pillars of support, recording net purchases of ₹2,883.17 crore.

This trend underscores the growing resilience of the Indian market, where domestic liquidity is increasingly capable of absorbing foreign outflows, especially during periods of global macro uncertainty.

Derivatives Market Activity

Activity in the derivatives segment pointed toward a constructive but cautious outlook. The Nifty Put-Call Ratio (PCR) stood at 1.07, indicating a slightly bullish bias as put writing intensified at lower levels.

• Maximum Call Open Interest (OI) was concentrated at the 24,000 strike (acting as a psychological barrier for some participants), while maximum Put OI was seen at the 24,600 level, suggesting a firm support zone for the current series.
• Nifty futures closed with a premium, ending at approximately 24,637 levels, up 0.33%.
• There were no stocks under the F&O ban list for the session, allowing for unrestricted institutional positioning across the board.

Key Drivers and Outlook

The primary catalyst for the day was the RBI’s Monetary Policy Committee (MPC) outcome. The central bank kept the repo rate unchanged at 5.25% for the third consecutive time this fiscal year. More importantly, the RBI revised its FY27 GDP growth estimate upward to 6.7% from 6.6% and lowered its inflation forecast to 5.0%, sending a positive signal to the markets.

Other contributing factors included:

• Crude Oil Prices: Brent crude fell sharply to nearly $78.50 per barrel, easing concerns over imported inflation and providing a boost to oil-dependent sectors like Paints, Chemicals, and Aviation.
• Sectoral Performance: Metal and Realty sectors were the top gainers. Metal stocks like Hindustan Copper and Vedanta surged on the back of rising base metal prices on the LME. The Auto index also hit a fresh record high following the RBI’s optimistic growth outlook.
• Currency Strength: The Indian Rupee strengthened by 15 paise to close at 95.13 against the US dollar, supported by improved sentiment and the RBI’s status quo.

Looking ahead, the market is expected to remain stock-specific as the Q1 FY27 earnings season continues. Investors will also keep a close eye on global central bank commentaries and geopolitical developments for further direction.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: FII DII Stock Market Institutional Investors Nifty Sensex