Benchmark stock indices experienced a decline on Tuesday as investors exercised caution in anticipation of upcoming significant events: the Reserve Bank of India's (RBI) monetary policy review and the release of US inflation data later in the week. The prevailing circumstances were further complicated by continuous outflows of foreign funds and a sluggish trend observed in both Asian and European markets, which negatively impacted the domestic market sentiment.

The 30-share BSE Sensex underwent a decrease of 106.98 points or 0.16 percent, ultimately settling at 65,846.50. Throughout the trading day, it saw a decline of 200.85 points or 0.30 percent, reaching 65,752.63. The NSE Nifty, similarly affected, slipped by 26.45 points or 0.13 percent to conclude at 19,570.85.

With expectations leaning towards a status quo in the key interest rates, the high-powered rate-setting panel MPC, headed by RBI Governor Shaktikanta Das, initiated its three-day meeting on Tuesday to finalize the details of the upcoming bi-monthly policy. The decision reached by the Monetary Policy Committee (MPC) is slated to be unveiled on Thursday, August 10, under the guidance of Governor Das.

Among the constituents of the Sensex, several prominent stocks including Power Grid, Mahindra & Mahindra, JSW Steel, HCL Technologies, Sun Pharma, Nestle, IndusInd Bank, Reliance Industries, Bharti Airtel, and ITC faced notable setbacks. Conversely, Tech Mahindra, Wipro, Bajaj Finance, State Bank of India, Bajaj Finserv, Axis Bank, Titan, and ICICI Bank emerged as significant gainers.

The performance of Asian markets varied, with Seoul, Shanghai, and Hong Kong experiencing declines, while Tokyo's market concluded on a positive note. Meanwhile, European markets displayed negative trends, while US markets closed in positive territory on the preceding Monday.

Global oil benchmark Brent crude recorded a decline of 1.38 percent, reaching USD 84.16 per barrel.

On Monday, Foreign Institutional Investors (FIIs) divested equities amounting to Rs.1,892.77 crore, according to data from exchanges. In the previous session, the BSE benchmark had risen by 232.23 points or 0.35 percent, reaching a settlement of 65,953.48. Similarly, the Nifty demonstrated an advancement of 80.30 points or 0.41 percent, ultimately concluding at 19,597.30.

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