European Markets Hold Steady Amid Political Uncertainty 

Indian markets are expected to open flat as investors digest yesterday’s stellar gains, amid the absence of strong overseas signals, particularly with US markets closed for the Labour Day holiday. 

US markets were closed for a holiday, and global markets traded independently on Monday, with Chinese tech stocks surging while European equities held steady amid continued pressure on long-dated European bonds.  

European equity markets closed higher, buoyed by gains in defence and healthcare sectors. Sentiment improved following a U.S. appeals court ruling that declared many Trump-era tariffs illegal. The 7-4 decision by the U.S. Court of Appeals for the Federal Circuit upheld a lower court’s determination that Trump exceeded his emergency economic powers when imposing broad-based duties.  

The pan-European Stoxx 600 advanced 0.23%. Germany’s DAX rose 0.57%, while Britain’s FTSE 100 and France’s CAC 40 gained 0.1% and 0.05% respectively. Switzerland’s SMI declined 0.09%.  

French political uncertainty remained in focus as Prime Minister François Bayrou prepared to begin discussions with political parties, attempting to prevent his government’s collapse in next week’s confidence vote that opposition leaders predict will fail.  

Asian markets generated greater excitement, with Alibaba’s Hong Kong shares surging 18.5% after the Chinese tech giant reported AI-driven revenue growth in its cloud division. 

U.S. economic data will dominate the week ahead, featuring manufacturing and services surveys, as well as employment figures, culminating in Friday’s August payrolls report. Economists forecast 75,000 new jobs, though estimates range from zero to 110,000 amid uncertainty following July’s unexpectedly weak data. The unemployment rate is expected to rise to 4.3%.  

Oil prices edged higher as supply disruptions from the intensified Russia-Ukraine conflict and dollar weakness offset concerns about increased output and potential demand impacts from U.S. tariffs.  

Nifty broke a three-session losing streak by rising 198 points or 0.81% yesterday to close at 24625. After opening slightly in the green, Nifty continued its upward journey throughout the day and ended the session near the day’s high. Leading the charge within the Nifty pack were auto heavyweights like Bajaj Auto, M&M, and Hero MotoCorp, which ended as the top gainers after releasing their August sales numbers.  

Immediate resistance for the Nifty is now seen at 24800, above which sharp short covering is expected. However, any level below 24400 would resume the downtrend, which could further drag the Nifty towards the next support of 24270 (200-day EMA). Starting today, Nifty weekly options will expire on Tuesdays. 

Source: HDFC Securities Prime Daily, 2 Sept 2025 

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