Bulls Pause on Middle East Jitters
The Nifty 50 closed at 24,366, down 29.85 points or 0.12%, while the Sensex slipped 70.71 points to 78,009.25, snapping a two-week winning streak. Brent crude's 1.75% jump to $88.59 amid Iran-related tensions was the key overhang, even as easing expectations of a September Fed hike offered some cushion. Bank Nifty underperformed sharply, down 0.68% to 57,491, while the Midcap index bucked the trend, rising 339 points to 63,782, showing broad-based resilience beneath the headline weakness.
FIIs Tiptoe Back, DIIs Pull Back
Foreign investors flipped from ₹511 crore of selling on Thursday to ₹508 crore of buying on Friday, a modest but notable reversal after what CNBC-TV18 describes as 19 months of FII selling that erased nearly a decade of prior inflows. Domestic institutions, meanwhile, sharply cut their buying to ₹356 crore from ₹4,353 crore a day earlier. This tug-of-war between returning foreign flows and cooling domestic support is an early signal worth tracking rather than a confirmed trend reversal.
Defence Sector's Big Week
Reliance Industries and Rolls-Royce announced plans to jointly develop an indigenous combat engine for the Advanced Medium Combat Aircraft programme, alongside exploring an Aerospace Gas Turbine Complex in India. Separately, HAL tied up with Adani Defence and BEML to manufacture fuselage structures for 156 Prachand Light Combat Helicopters slated for delivery from 2028. Bharat Dynamics posted standalone Q1 profit up sixfold to ₹118.79 crore on 131% revenue growth, though the stock stayed largely flat despite the blowout numbers, underlining how much good news may already be priced into the sector.
Earnings Season: A Study in Contrasts
Tata Motors Passenger Vehicles shares fell 6% to ₹329 after an 80% profit drop tied to JLR headwinds and elevated material costs, with Motilal Oswal maintaining a cautious 'Sell' stance. Natco Pharma slid over 6% on a 57% profit decline even as its board approved a ₹2,000 crore fund raise, and Aurobindo Pharma weakened after a USFDA warning letter hit subsidiary Eugia's Unit 1. In contrast, Welspun Living surged 10% on an 84% profit jump, Galaxy Surfactants hit a 20% upper circuit on profit more than doubling, and Honasa Consumer gained 4% on record quarterly numbers — a reminder that this earnings season is rewarding execution, not sector alone.
Macro Backdrop Stays Supportive
India's forex reserves rose $14.1 billion to a fiscal-year high of $707 billion for the week ended August 7, per RBI data, though still below the earlier peak of $728 billion. Wholesale inflation eased marginally to 9.78% in July from 9.87% in June on softer fuel costs, even as retail inflation ticked up to 4.45% with food prices at a 19-month high. Crisil flagged growth could slow to 6.6% this fiscal, and the April-June current account deficit widened to $3.1 billion, giving the RBI reason to stay flexible on rates rather than committing to a fixed path.
Corporate Actions and Capital Markets Abuzz
Zee Entertainment shares rallied 7-8% after SAT stayed a SEBI order, clearing the way for its proposed ₹3,143 crore preferential warrant issue to promoters, subject to a disputed penalty payment. IDFC First Bank received its first international investment-grade rating from S&P ('BBB-', Stable Outlook), while Bank of Baroda raised $700 million via overseas bonds at 5.114-5.318% coupons. The IPO pipeline stayed busy, with Zetwerk and Svatantra Microfin filing papers for ₹2,600 crore and ₹3,000 crore raises respectively, and LEAP India debuting at a 4% premium after 8.38x subscription.
Gold's Quiet Compounding Story
An SGB 2019-20 Series III redemption today fixed the price at ₹15,310 per unit against an issue price of ₹3,449, delivering holders an absolute gain of roughly 344% over six years. This lands alongside gold's own 0.26% uptick to 4,432 today, a reminder of the metal's role as a long-duration store of value even as equity markets chop sideways on geopolitical noise.