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Below the Quote on Daily Market Commentary for August 31st 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equities are likely to maintain a cautious bias as renewed US-Iran tensions and rising crude prices weigh on sentiment. Brent crude rose 3.7% to around US$91/bbl after fresh US strikes on Iran, reversing the recent easing and bringing inflation, the rupee and external balances back into focus. Investors will track India’s Q1FY27 GDP, auto sales, PMI readings and US jobs data this week. On Monday, Nifty 50 declining 0.4% to 24,080 as higher crude and geopolitical concerns weighed on sentiment. The index recovered from the day's lows but remained in the red. The Nifty Midcap 100 gained 0.2%, while Smallcap 100 declined 0.7%. Private Banks and Healthcare outperformed, while Media, Metals and FMCG lagged. The escalation in West Asia remains the key risk, with prolonged disruption to energy supplies potentially keeping crude elevated and pressuring India's inflation and rupee. India's record-high forex reserves of US$729.3 billion provide a buffer against external pressures. India’s Q1FY27 GDP data due today, along with PMI and auto sales, will provide further cues on domestic growth and demand. The RBI expects 7% growth, while market expectations are at 7.3–7.5%. Defence remains a key structural theme, with production quadrupling since 2014 and exports reaching ?39,000 crore. Progress on AMCA, Javelin procurement, defence export reforms and additional S-400 units reinforces the indigenisation push. Sugar stocks remained in focus as raw sugar reached a 16.5-month high and London white sugar a 17-month high, supported by tighter global supply expectations and weaker European production. However, domestic government measures to improve availability could limit gains in sugar realisations.

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