Indian Markets Dip: Sensex Falls Amid F&O Changes & Tax Hikes

Indian equity benchmarks traded sluggishly during early afternoon deals, with the BSE Sensex dipping 0.32%. The Nifty also slipped more than a per cent, as investors reacted to multiple domestic and global factors.

Key Market Metrics

• BSE Sensex currently trades at 78389.72.
• The index declined by 249.31 points.
• It traded within a range of 78380.07 and 79143.15.
• There were 19 stocks advancing against 11 stocks declining on the index.

Market sentiment was influenced by the introduction of a new auction mechanism for shares having futures and options (F&O) contracts. Investors also closely monitored developments in the U.S.-Iran conflict and awaited the Reserve Bank of India’s (RBI) upcoming monetary policy decision for further guidance.

Windfall Tax Adjustments

Further pressure came from the government’s decision to increase the windfall tax on exports of petrol, diesel, and aviation turbine fuel (ATF). These revised rates apply for the fortnight commencing August 3, 2026.

• Special Additional Excise Duty (SAED) on diesel exports increased to Rs 25.5 per litre from Rs 15.5 per litre.
• SAED on ATF exports rose to Rs 22 per litre from Rs 14.5 per litre.
• Duty on petrol exports was raised to Rs 3.5 per litre, up from Rs 2.5 per litre levied on July 16.

Globally, Asian markets mostly traded in green, despite survey results indicating a slowdown in China’s manufacturing sector. The S&P Global RatingDog China General Manufacturing Purchasing Managers’ Index registered a four-month low of 50.9 in July, down from 51.7 in June.

Sectoral Performance on BSE

On the sectoral front, some indices recorded gains while others experienced declines. Capital Goods led the advancers, whereas IT and Energy sectors saw significant losses.

• Top gaining sectors: Capital Goods (up by 0.99%), Industrials (up by 0.67%), Metal (up by 0.41%), Power (up by 0.41%), Consumer Disc (up by 0.31%).
• Top losing sectors: IT (down by 0.57%), Energy (down by 0.47%), TECK (down by 0.40%), Oil & Gas (down by 0.36%), Bankex (down by 0.33%).

Sensex Top Movers

Individual stocks on the Sensex showed mixed performance during the trading session. Trent and Asian Paints posted notable gains, while HDFC Bank and Hindustan Unilever were among the top decliners.

• Top Gainers: Trent (up by 1.49%), Asian Paints (up by 1.39%), Mahindra & Mahindra (up by 1.02%), Bharat Electronics (up by 0.82%), Tata Steel (up by 0.79%).
• Top Losers: HDFC Bank (down by 1.42%), Hindustan Unilever (down by 1.05%), Infosys (down by 0.91%), Reliance Industries (down by 0.88%), Interglobe Aviation (down by 0.59%).

MSME Sector Initiatives

In a separate legislative development, the Rajya Sabha passed a bill aimed at strengthening the Ministry of Micro, Small and Medium Enterprises (MSME) environment in India. This legislation seeks to address critical issues within the sector.

• The bill targets delayed payments to MSMEs.
• It prescribes timelines for faster dispute adjudication and facilitates recovery of settlement agreements.
• Union Minister for MSME Jitan Ram Manjhi stated the bill improves administrative structure and payment mechanisms.