Concerns over punitive US tariffs, the prospect of US interest-rate cuts, and upcoming decisions on GST rate reductions are set to guide Indian markets this week.
On Monday, Indian equities are expected to open on a positive note, buoyed by Friday’s rally in US markets. Whether that momentum can sustain will depend on developments through the week.
The biggest overhang is the looming US tariff decision, with a 50 percent levy scheduled to come into effect on Wednesday unless delayed. Any reprieve will be seen as a relief, particularly after Washington named Sergio Gor—an influential aide to President Donald Trump—as its new ambassador to India.
GDP data for both India and the US will be released later in the week, though any impact on Indian equities is likely only next week.
The GST Council will meet on September 3–4 to finalise a rate cut, effective from October 1. Lower duties on cars, consumer durables, FMCG goods, cement and steel could trigger a temporary slowdown in September sales as consumers wait for reduced prices. Industry fears a muted start to the festive season, with potential pressure on second-quarter earnings.
Markets are also hopeful that the US Federal Reserve will begin cutting rates next month. Speaking at Jackson Hole on Friday, Fed Chair Jerome Powell hinted at policy easing. The Federal Open Market Committee meets on September 16–17. This week, the July Personal Consumption Expenditure (PCE) index will be released, with economists expecting a 2.9 percent annual rise (0.3 percent monthly). While not fully supportive of rate cuts, weakening labour data and political pressure from President Trump are seen strengthening the case. The probability of a September rate cut has risen back to 84 percent.
On Friday night, Gift Nifty futures closed at 24,879 and briefly touched 24,999 in early Monday trade, signalling a firm start for Indian equities.
Europe: European indices closed higher on Friday, driven by rate-cut hopes. London’s FTSE 100 marked a fourth consecutive record close. European pharmaceutical stocks also gained after Trump assured that duties on medicines would be capped at 15 percent, compared with an earlier threat of 250 percent.
US: Wall Street surged on rate-cut optimism, with the Dow Jones closing at a record. The S&P 500 ended just three points shy of its peak. For the week, the Dow gained 1.5 percent, the S&P 0.3 percent and the Nasdaq 0.6 percent.
Tech shares rebounded after Powell’s comments. Nvidia, Meta, Alphabet, Apple and Amazon advanced, while Tesla jumped 6 percent. Intel climbed 5.53 percent after the US government acquired a 10 percent stake, though questions remain over its long-term business outlook.
The Dow Jones Industrial Average surged 846.20 points (1.89 percent) to close at 45,631.74. The S&P 500 rose 96.74 points (1.52 percent) to 6,466.91, while the Nasdaq Composite gained 396.22 points (1.88 percent) to finish at 21,496.54.
US futures were slightly lower in early Monday trade, with the Dow, S&P and Nasdaq down 0.08, 0.11 and 0.12 percent respectively.
Asian equities opened higher, with Japan’s Nikkei up 0.8 percent, and South Korean and Australian indices climbing nearly 1 percent. Hong Kong and Shanghai also started stronger.
After six consecutive sessions of gains, domestic equities corrected on Friday amid tariff worries. Except for smartphones and pharmaceuticals, all Indian exports to the US could face a 50 percent duty from Wednesday, raising concerns of sharp declines in outbound trade.
Banking, financials, metals, IT, realty and FMCG shares saw heavy selling. Vodafone Idea rallied 8 percent on speculation of favourable relief in the AGR dues case, while Kitex Garments fell 5 percent.
The Nifty 50 shed 213.65 points (0.85 percent) to 24,870.10, while the Sensex dropped 693.86 points (0.85 percent) to 81,306.85. The Bank Nifty slipped 606.05 points (1.09 percent) to 55,149.40. The Nifty Midcap 100 declined 0.14 percent and the Smallcap 100 by 0.26 percent.
Market breadth was weak, with 1,662 BSE stocks advancing against 2,421 declines. On NSE, 1,178 shares gained while 1,760 fell.
Foreign investors sold a net ₹1,622.52 crore in the cash segment on Friday, while domestic institutions offloaded ₹329.25 crore. In August so far, FIIs have sold over ₹24,000 crore, largely in financials, IT and oil.
Key Nifty supports are at 24,850 and 24,800, with resistance seen at 25,025 and 25,075.
Gold surged over 1 percent on Friday after Powell suggested the Fed was open to policy shifts, closing at $3,373.10 an ounce. Prices slipped below $3,363 in early Monday trade. In Kerala, 22-carat gold fell ₹120 on Friday to ₹73,720 per sovereign, before jumping ₹800 on Saturday to ₹74,520. Silver rose 1 percent to $38.76 an ounce.
Industrial metals traded mixed. Copper gained 0.34 percent to $9,642.85 a tonne, aluminium rose 0.34 percent to $2,590.67, while tin, zinc and lead also edged higher.
In global agricultural commodities, rubber added 0.06 percent to 169.90 cents/kg, cocoa jumped 2.55 percent to $7,624.91 a tonne, and coffee climbed 3.57 percent. Tea fell 1.96 percent, while palm oil rose 1.55 percent.
Crude oil was little changed, with Brent settling at $67.73 a barrel before easing to $67.57 in early trade. WTI stood at $63.54 and Murban at $70.59. Natural gas fell 2 percent.
Cryptocurrencies corrected over the weekend after sharp gains on Friday. Bitcoin, which had touched $117,000, was trading above $113,500 on Monday morning. Ether briefly hit a record $4,954 before easing towards $4,800.
The dollar index fell 1 percent on Friday to 97.72 before edging back to 97.94. The euro strengthened to $1.1712, sterling to $1.351, and the yen to 147.09 per dollar.
US 10-year Treasury yields slipped to 4.256 percent as bond prices rose on rate-cut expectations.
The rupee weakened 23 paise to close at 87.53 against the dollar on Friday. China’s yuan firmed to 7.17 per dollar.
Sensex: 81,306.85 (-0.85%)
Nifty 50: 24,870.10 (-0.85%)
Bank Nifty: 55,149.40 (-1.09%)
Midcap 100: 57,629.75 (-0.14%)
Smallcap 100: 17,919.50 (-0.26%)
Dow Jones: 45,631.74 (+1.89%)
S&P 500: 6,466.91 (+1.52%)
Nasdaq: 21,496.54 (+1.88%)
Dollar: ₹87.53 (+₹0.26)
Gold (ounce): $3,373.30 (+$34.10)
Gold (sovereign): ₹74,520 (+₹800)
Brent crude: $67.73 (+$0.06)