It was another fight today between the bulls and bearish forces and the bearish forces managed to pull the gains down to lower greens.
Indian equity markets closed today with marginal gains today amid soft optimism after significant GST reforms. The benchmark BSE Sensex closed at 80,718 points, up by 150 points or 0.18%, while the Nifty 50 settled at 24,734, gaining 19 points or 0.07% from the last session. The markets gapped up when they opened today morning and were positively impacted by the GST Council's approval of a rationalised tax structure that puts most goods in the 5% and 18% GST slabs from September 22, including the abolition of GST on essentials such as bread and paneer. But the tariff-storm caught up soon and narrowed the gains.
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Despite the initial positive momentum from GST rationalisation, the market remained subdued by concerns over continued tariff threats from the US affecting macroeconomic approach and export-driven companies.
Financial, automobile, and consumer sectors led the gains, with Mahindra & Mahindra rising 5.9%, Bajaj Finance up 4.2%, and Bajaj FinServ up by 2%. The auto sector index rose almost 1%, while FMCG companies rose about 0.3%. On the other hand, sectors like IT, media, metals, oil and gas, realty, power, and PSU banks fell between 0.5 to 1%. Mid-cap and Small-cap indices fell by about 0.6%, indicating some profit-booking and cautious investor sentiment ahead of key global events and trade developments.
The GIFT Nifty futures for September 5 suggest a modestly positive start for the Indian markets. As of the latest data, GIFT Nifty August futures traded about 15 points higher, indicating a possible flat to mildly bullish opening. Market analysts anticipate the Nifty to test resistance levels around 24,900 to 25,050, with support likely near 24,500 to 24,600. Momentum on the upside is likely to gain strength if Nifty crosses the 24,800 mark decisively.
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Bank Nifty has bounced back from recent lows and is placed close to support levels of 53,500. Any sustained rally above 54,100 may lead to short covering, resulting in a possible up move of around 1,000 points. However, market participants are cautioned to monitor global cues and institutional flows as foreign portfolio investors have maintained selling pressure in early September, partly offset by domestic institutional buying.
With GST reforms offering modest support and positive earnings in some sectors such as auto and financials, markets may see incremental gains tomorrow. However, geopolitical trade tensions, upcoming US jobs data, and consistent FII outflows are key risk factors. Investors are recommended to remain cautious, keeping an eye on sectors with robust domestic demand and low export vulnerability. It would be interesting to see how the markets open tomorrow morning, will the bulls gain edge or bear would continue their red momentum in the long run.
