The headline equity indices ended near the flat line with small gains on Friday. Weak European shares put pressure on domestic shares. Meanwhile, the Reserve Bank of India (RB... The headline equity indices ended near the flat line with small gains on Friday. Weak European shares put pressure on domestic shares. Meanwhile, the Reserve Bank of India (RBI) increased the interest rate by 50 basis points to 5.4% and retained the FY23 GDP growth forecast at 7.2%. The barometer index, the S&P BSE Sensex, was up 89.13 points or 0.15% to 58,387.93. The Nifty 50 index gained 15.50 points or 0.09% to 17,397.50. The Nifty opened higher and traded with modest gains for most part of the session. It briefly slipped into the negative terrain to hit the day's low of 17,348.75 in the mid-afternoon trade. It bounced back in late trade and ended with small gains.

In the broader market, the S&P BSE Mid-Cap index rose 0.09% while the S&P BSE Small-Cap index added 0.23%.

The market breadth was positive. On the BSE, 1,866 shares rose and 1,482 shares fell. A total of 161 shares were unchanged.

The Nifty IT index (up 0.64%), the Nifty Bank index (up 0.44%) and the Nifty Financial Services index (up 0.36%) outperformed the Nifty 50 index.

The Nifty Auto index (down 1.09%), the Nifty Consumer Durables index (down 1.09%) and the Nifty Media index (down 0.52%) underperformed the Nifty 50 index.

Economy:

The RBI's Monetary Policy Committee (MPC) today (5 August 2022) hiked 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 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 7.3159 as compared with 7.157 at close in the previous trading session.

In the foreign exchange market, the rupee advanced against the dollar. The partially convertible rupee was hovering at 79.23, compared with its close of 79.40 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement declined 0.23% to Rs 52,046.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, added 0.19% to 105.89.

In the commodities market, Brent crude for October 2022 settlement rose 6 cents or 0.06% at $94.18 a barrel.

Global Markets:

European shares slumped while Asian stocks rose across the board on Friday as investors tracked corporate earnings and awaited a key U.S. jobs report.

The Bank of England on Thursday hiked interest rates by 50 basis points while forecasting U.K. inflation to peak above 13% in October and the economy to enter a prolonged recession in the fourth quarter.

Wall Street stocks ended mixed, with gains for high-growth stocks offset by the drag from energy shares, as a key US jobs report loomed on Friday.