The Prime Daily: 01 September 2026

Authored By Prime Research | Published at: Sep 1, 2026 09:15 AM IST

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US Stocks Fall on Oil, India GDP Tops Forecasts

US indices ended lower on Monday as a rise in crude oil prices and renewed tensions in the Middle East revived inflation and higher-for-longer rate concerns.

The S&P 500 declined 0.33% to 7,686, while the Nasdaq Composite was relatively resilient, slipping 0.12% to 26370.

Positive economic data have fuelled discussions about the Federal Reserve’s next policy moves, stabilising technology and healthcare stocks.

Despite the weak final session, all three major indices ended August higher, and the Dow recorded its fifth consecutive monthly gain.

US government bond yields experienced notable volatility in response to fresh labour market and inflation indicators. Investors are demanding higher premiums as debate intensifies over whether the central bank will extend its pause or cut rates further later this year.

Energy markets saw Brent and WTI crude oil balances near recent ranges amid offsetting macroeconomic forces. While production constraints from major oil-exporting nations provided a price floor, demand concerns from major industrial economies limited further upside.

Data from the Ministry of Statistics and Programme Implementation revealed that India’s economy expanded by 7.8% during the April-June 2026 quarter. Driven largely by strong exports and investments, this performance surpassed consensus expectations and marked the twelfth consecutive quarter of upside growth surprises.

Surplus liquidity in the Indian banking system surged to nearly Rs 5 lakh crore at the end of August, its highest level in over four months, boosted by month-end government spending and robust foreign currency deposits.

Bank credit in India continued to expand at a robust pace in July, with overall bank credit rising 19.3% year-on-year, according to data released by the RBI. The acceleration was supported by strong lending growth across industry, services, agriculture and personal loans.

The newly introduced Closing Auction Session system experienced its first significant test amid a scheduled index rebalancing yesterday. The high volume of concentrated portfolio adjustments by passive funds during the final trading window triggered wild price fluctuations across individual equities.

The Indian rupee staged a stellar comeback, appreciating 22 paise to close at 95.16, its strongest level since August 5, overcoming an early dip triggered by Friday’s surge in the dollar index after hawkish remarks from Fed Chair Warsh at the Jackson Hole symposium. This resilient recovery was heavily anchored by timely, suspected intervention by the Reserve Bank of India, alongside a surge in dollar flows linked to the index rebalancing and the FCNR(B) schemes.

During yesterday’s session, Nifty breached the prior swing-low support at 24,025 and the psychological 24,000 mark; however, the second-half recovery enabled the index to close above these crucial supports. In the short term, the 24,200–24,250 zone is likely to act as strong resistance, with multiple moving averages clustered there. On the lower side, a decisive break below 23,993 could extend losses toward the next support near 23,890.

Indian equities are poised for a subdued opening amid negative global cues.

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