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Below the Quote on Market Commentary 02nd September 2025 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Nifty edged lower by 0.2% to 24,580. Early gains on the back of strong macro data were erased in the second half amid profit booking. Sentiment stayed cautious ahead of tomorrow’s crucial GST meeting and weak global cues. Volatility spiked in second half due to the monthly F&O expiry — the first Tuesday expiry after NSE shifted Nifty F&O contracts from Thursday to Tuesday. Broader markets posted marginal gains, with the Nifty Midcap100 up 0.3% and Smallcap100 up 0.5%. FMCG was the top gainer, rising over 1% and extending its rally for the third straight day, as the proposed GST reforms are expected to make it the biggest near-term beneficiary. Sugar stocks stayed in focus after the government lifted caps on ethanol production from cane juice and molasses on Sept 1, along with the Supreme Court’s clearance for the E20 rollout. Domestic institutions continued their strong support, recording inflows of ~?95,000 Cr in August. On the policy front, PM Modi wrapped up his four-day visit to Japan and China, calling the SCO summit “productive.” Key outcomes included China lifting restrictions on rare earth and fertiliser exports, easing supply chains and benefiting Indian EMS and fertiliser companies; resumption of direct flights and pilgrimages, boosting tourism and aviation; and stronger trade alignment with Russia and China, which is expected to create multi-sector growth opportunities for India. Investors now keenly await the GST Council meeting beginning tomorrow, which could guide near-term sentiment. Globally, focus remains on upcoming US economic data — Manufacturing PMI, JOLTS job openings, payrolls, and inflation prints — that will be key in shaping expectations around the Fed’s next rate cut.

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