Market to Open Soft; All Eyes on GST Deliberations

Indian markets are poised to open subdued on the back of weak overnight global cues

Wall Street started off September on a sharply lower note on Tuesday as investors weighed the future of President Donald Trump’s tariffs after a federal appeals court ruled most of his sweeping tariffs illegal.

After initially showing a significant move to the downside, stocks regained some ground over the course of the trading day on Tuesday but remained firmly in the negative territory. The major averages all moved notably lower, extending the pullback seen during last Friday’s session.

The tech-heavy Nasdaq slumped 175.92 points or 0.8 per cent to 21,279, but had tumbled by as much as 1.5 per cent in early trading. The S&P 500 slid 44.72 points or 0.7% to 6,415, while the Dow fell 249.07 points or 0.6% to 42,295.

U.S. rate futures widely expect the Federal Reserve to lower interest rates this month, pricing in a 92% chance of a 25-basis-point cut at the end of its two-day policy meeting on September 17.

With September historically the worst month for the U.S. stock market, fears over Federal Reserve independence and President Donald Trump’s tariff uncertainty were at the fore, converging to jolt stocks and bonds.

Reports on factory orders and job openings may attract some attention today, along with the Federal Reserve’s Beige Book.

Indian markets gave up early gains to end lower on Tuesday ahead of the crucial upcoming two-day Goods and Services Tax (GST) Council meeting later this week.

A spike in oil prices amid rising risks of potential disruptions from the Russia-Ukraine conflict and weekly Nifty F&O expiry also added to the volatility in the latter half of the session.

On the first Tuesday weekly expiry session, the Nifty shed 45 points (0.18%) to close at 24579. After an initial surge that took the index to an intraday high of 24,756, the Nifty reversed course sharply post-12:45 PM, nosediving a steep 234 points from its peak.

Despite the Nifty’s decline, the broader market continued to outperform. The Nifty Midcap 100 Index and Nifty Smallcap 100 Index gained 0.27% and 0.53%, respectively. Market breadth remained positive for the second consecutive day.

The Indian Rupee, while erasing most of its intraday gains, managed to end the day with gains for the second consecutive day. The rupee appreciated by four paise against the greenback to close at 88.16 levels. This selling at higher levels was primarily due to a risk-averse sentiment and a spike in imported commodity prices.

The Nifty failed to surpass the nearest resistance of its 5-day DEMA (24613) on a closing basis. However, the fall from the highs isn’t a definitive sign that the bullish momentum has completely faded. A strong base near 24400 could lead to renewed demand at lower levels. For the bullish trend reversal to be confirmed, a level above 24,800 needs to be decisively surpassed.

The 56th Meeting of the GST Council will begin today in New Delhi. Union Finance Minister Nirmala Sitharaman will chair the two-day meeting. The Council is expected to deliberate on India’s next-generation GST reforms, including rationalisation of tax rates and simplification of compliance.

Source: HDFC Securities Prime Daily, 3 Sept 2025

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