In August 2026, the Nifty 50 fell 1.24% (303 points), snapping a two-month winning streak, while Bank Nifty outperformed with a 1.33% (760 points) gain. Despite Nifty’s underperformance, Smallcap and Midcap indices extended their winning streak to five consecutive months. The Nifty slipped below the 200-day EMA after reclaiming it in July and closed below all major moving averages. The MPC, at its August 3–5 meeting, unanimously kept the repo rate at 5.25% with a neutral stance for the fourth consecutive meeting, raised FY27 growth forecast to 6.7% from 6.6%, and cut inflation projection to 5% from 5.1%. The SEBI’s Closing Auction Session went live on August 3 for F&O stocks, adding end-of-day volatility amid concerns over higher index-option volatility on expiry days and contributing to persistent selling pressure through the month. India’s Q1 FY27 GDP growth came in at 7.8% YoY, above expectations and matching the previous quarter. The US 10-year Treasury yield rose to 4.75%, its highest since January 2025, while Brent crude crossed $90/bbl, raising inflation and global risk concerns as Iran and the US resumed fighting after a month-long lull. Sectorally, Metals (+3.73%), PSU Banks (+2.9%) and Pharma (+2.46%) outperformed, while FMCG was the biggest laggard, declining 6.3%.
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