Stock market next week: Indian stock market benchmarks, the Sensex and Nifty 50, ended lower for the third straight session on Friday, August 29, as persistent worries over Trump’s tariffs and their potential economic impact continued to dampen investor sentiment. The Sensex declined 271 points, or 0.34%, to close at 79,809.65, while the Nifty 50 slipped 74 points, or 0.30%, to end at 24,426.85. The BSE Midcap and Smallcap indices also fell, shedding 0.41% and 0.29%, respectively.
According to Vinod Nair, Head of Research, Geojit Investments Limited, markets are likely to display a mixed bias, with consumption-driven and domestic growth-oriented sectors—such as FMCG, Durables, Discretionary, Cement, and Infrastructure—well-positioned to benefit from GST cuts, firm demand, and higher government spending.
“Looking ahead, India’s resilience, supported by strong Q1 GDP print driven by government spending and policy measures, may provide a buffer against external headwinds, though fiscal concerns remain. A resolution of tariff disputes could act as a key catalyst for market sentiment, although the reciprocal 25% tariff is expected to remain in place in the near to medium term. Currently, sectors likely to be directly affected include Textiles, Equipment Manufacturers, Metals, Auto, and Seafood, while IT and Pharma may face sentimental pressure despite not being directly impacted by the tariffs. Limited progress in trade talks continues to add uncertainty and weigh on investor confidence. A multi-cap asset allocation strategy is expected to dominate in the current landscape. Investors will also keep a close watch on upcoming domestic and US macro data, including PMI prints, jobless claims, payrolls, and unemployment figures, for further insights,” Nair said.
Top 5 triggers for the Indian stock market
Auto sales data
The month of August has come to an end and carmakers two-wheeler manufacturers will announce their sales figures of the last month.
Trump tariffs on India
India is bearing the impact of the US-imposed tariffs, including a 25% duty levied as a penalty for purchasing cheaper Russian crude. The current 50% tariffs under Donald Trump pose a threat to $45 billion worth of Indian exports.
With these elevated tariffs, Indian products risk losing their competitive edge, potentially giving an advantage to countries like China and Vietnam, as the tariffs on India are higher compared to other Asian nations — China (30%), Vietnam (20%), Indonesia (19%), and Japan (15%).
“The coming week presents a challenging environment for Indian equities, as markets grapple with significant headwinds from the recently implemented 50% US tariffs on Indian goods, which took effect on August 27,” said Puneet Singhania, Director at Master Trust Group.
GST Council Meeting
The Goods and Services Tax (GST) Council has scheduled its 56th meeting for September 3–4 in New Delhi, according to a memorandum issued on August 22.
At this meeting, the Council is likely to review recommendations from various Groups of Ministers, including proposals to restructure the GST system into a two-rate framework as suggested by the Central Government.
“The market’s trajectory will largely depend on clarity regarding tariff negotiations and upcoming domestic policy measures, including potential GST rationalisation discussions,” Singhania added.
Global cues
A U.S. federal appeals court has declared that several of former President Donald Trump’s global tariffs were unlawfully imposed, dealing a significant setback to his economic policies and sparking renewed debate over the scope of presidential authority in trade matters.
On Friday, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s decision, ruling 7-4 that Trump had overstepped his powers under a decades-old law that permits presidents to take emergency economic actions.
On the other hand, investors are widely expecting that the US Fed will cut interest rates by 25 basis points at its September meeting.
FIIs and DIIs
“ Foreign Institutional Investors (FIIs) continued their aggressive selling in the derivatives segment, booking heavy shorts in both index options (- ₹7,559 Cr) and index futures (- ₹1,239 Cr). This persistent FII bearish stance suggests near-term pressure on Nifty and Bank Nifty, limiting upside moves. Unless strong domestic flows absorb the FII sell-off, volatility may intensify, keeping traders cautious in the coming sessions,” said Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth.
Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not Mint. We advise investors to check with certified experts before making any investment decisions.