Stock Market Today (3 Aug 2026): Nifty Hits 5-Month High, ITC Gains, Zee Slumps

Indian equities closed on a strong note on 3 August 2026, with the Nifty touching a five-month high and the Sensex climbing to 78,677 points as IT stocks led the charge. Sentiment got an additional lift from the Securities and Exchange Board of India's new F&O auction rules, which pushed the Nifty up more than 200 points during the session. Broader markets outperformed too, with the Nifty Midcap index hitting a record and the Smallcap index touching a 52-week high. However, the session wasn't uniformly positive — Zee Entertainment cratered on a fresh regulatory setback, and Muthoot Finance extended its slide after a disappointing quarter. The day was dominated by a heavy flow of first-quarter earnings, brokerage rating changes and corporate actions across banking, auto, energy and pharma stocks, giving investors plenty to parse before the next trading session.

ITC Rallies Despite Earnings Miss as Brokerages Turn Bullish

ITC's stock moved higher through the day even though its first-quarter profit fell, with the cigarette business acting as a drag on overall earnings and raising fresh concerns around tobacco taxation. Despite the miss, brokerages largely stayed constructive: Nomura upgraded the stock to 'Buy', CLSA reaffirmed its 'Outperform' rating with a target of ₹388, and Kotak reiterated a 'Buy' call at a ₹360 target, while JPMorgan held a more cautious 'Neutral' stance with a ₹310 target. The stock gained as much as 4% intraday as investors focused on improving cigarette volumes and possible recovery in the FMCG business rather than the near-term profit dip.

Zee Entertainment Slumps on Sebi Ban

Zee Entertainment shares fell sharply, losing around 12-14% during the session, after Sebi barred the company from market access for two months. The company maintained that its planned ₹3,143 crore fundraising remains unaffected by the order, though the ban introduces near-term uncertainty around the timeline and approval of related warrants. Brokerages were divided in their response — Kotak and CLSA both upgraded the stock following the promoter's move to raise stake through warrants at ₹126, and CLSA set a target of ₹125, suggesting some investors view the sell-off as overdone even as the regulatory cloud persists.

Paytm: Stake Sales Alongside Strong Q1 Show

One97 Communications, which operates Paytm, saw investor activity on two fronts. On one hand, early backers including SAIF and Elevation moved to sell a 2.3% stake in a ₹2,002 crore block deal at a 5% discount to the prevailing price. On the other, the stock touched a four-year high after the company reported a 79% surge in profit, with brokerage MOFSL setting a target price of ₹1,475. The combination of profitable growth and continued stake sales by early investors reflects a maturing story — strong operating performance is being used by some early backers as an opportunity to book gains, even as new investors bet on further upside.

Muthoot Finance Falls on Weak Quarter

Muthoot Finance was among the weakest performers, falling roughly 10-11% after its first-quarter numbers showed net interest margins dropping nearly 297 basis points. The soft print triggered a wave of brokerage downgrades, with Jefferies and Investec both turning cautious, while Bernstein maintained a bullish ₹4,500 target and CLSA kept an 'Outperform' rating with a ₹4,000 target. The divergence in brokerage views suggests the market is still working out whether the NIM compression is a one-off or points to a more structural challenge for the gold-loan financier's growth guidance.

Bharti Airtel Delivers Strong Growth

Bharti Airtel reported a 47% jump in quarterly profit alongside 14.5% revenue growth year-on-year, reinforcing the telecom sector's steady momentum. The results add to a broadly positive earnings season for large-cap telecom and technology names and could support continued investor interest in the sector as data consumption and subscriber additions remain healthy.

Auto Sector Posts Robust July Sales

Automobile makers reported strong July dispatch numbers across categories. TVS Motor's sales jumped 38% year-on-year, with EV sales soaring 158%. Bajaj Auto posted a 30% rise to 4.75 lakh units, Tata Motors' passenger vehicle sales rose 59% though they slightly missed estimates, Ashok Leyland's sales grew 33% with exports up 30%, and Force Motors reported a 36% jump to 3,770 units. The broad-based strength across two-wheelers, passenger vehicles and commercial vehicles points to healthy underlying demand heading into the festive season.

Oil Marketing Companies: Losses Despite Falling Crude

IOC, BPCL and HPCL together reported a combined Q1 loss of ₹18,149 crore, which came in lower than the government's own estimate, as LPG under-recoveries eased to ₹475-490 per cylinder in July. Even so, all three stocks gained around 3% during the session as Brent crude prices declined, easing input cost pressure and improving the near-term outlook for refining and marketing margins.

Sector Analysis

Banking and financial services saw a mixed picture: HDFC Bank continued to underperform the Nifty despite strong buy ratings, while Sundaram Finance posted a 22% rise in quarterly profit with improving asset quality. The energy sector was led by resilient performance from oil marketing companies even amid reported losses, while Reliance and Nayara faced margin pressure after the government raised the windfall tax on fuel exports. Information technology stocks were among the biggest gainers of the session, helping push the Sensex to its intraday high, even as Wipro remained under pressure following a large contract cut from Meta. The auto sector's July sales data added a constructive undertone for the broader market, while media stocks stayed volatile following the Zee regulatory action.

Market Outlook

The Nifty's move to a five-month high, supported by Sebi's new F&O auction framework and a strong IT rally, points to improving risk appetite among investors. Robust July auto sales and continued earnings strength from names like Bharti Airtel and Paytm add to the bullish case. On the other hand, the Zee ban, Muthoot Finance's margin pressure and continued losses at oil marketing companies highlight pockets of stress that could weigh on sentiment. Investors may want to track upcoming earnings from ONGC, BSE and Torrent Power, along with further regulatory developments around Zee and the IEX market-coupling case, as these could shape near-term market direction.