Stock Market Weekly Forecast: US Tariffs, GST Reform in Focus as Sensex, Nifty Begin September on Weak Footing

As the Indian stock markets closed August on a turbulent note, all eyes now turn to the first week of September for cues from both domestic policy developments and global trade dynamics. The benchmark indices, the Bombay Stock Exchange (BSE) Sensex and National Stock Exchange (NSE) Nifty 50 ended in the red on August 29, marking their third consecutive session of decline.

Stock Market Weekly Forecast: How Will Dalal Street Trade on September 2025?

The Sensex slipped 270.92 points or 0.34% to close at 79,809.65, while the Nifty 50 shed 74.05 points or 0.30%, settling at 24,426.85. This capped off a volatile month, with the Nifty recording a loss of 1.38% - its second straight month of decline.

Investor sentiment remained under pressure throughout the week, weighed down by fresh U.S. tariffs on Indian goods and uncertainty around global trade relations. The penalties, which include a duty on discounted Russian crude, threaten as much as $45 billion in Indian exports.

Experts warn that Indian products may lose competitiveness to peers in China and Vietnam. According to Puneet Singhania of Master Trust Group, "The coming week presents a challenging environment for Indian equities," as global trade tensions persist and U.S.-India tariff talks remain inconclusive.

SCO Summit Discussions

Prime Minister Narendra Modi met Chinese President Xi Jinping during the Shanghai Cooperation Organisation (SCO) Summit in Tianjin on Sunday. Foreign Secretary Vikram Misri shared that both leaders discussed enhancing bilateral trade and strengthening ties between their nations.

"Two leaders also exchanged views on ways to increase and balance bilateral trade, strengthen people-to-people ties, cooperate on trans-border rivers and jointly fight terrorism," said Misri. They aimed to progress on these issues based on mutual respect and interests.

Sensex, Nifty Prediction This Week: Share Market Monthly Outlook For September

On the technical front, the Nifty's weakness was underscored by its drop below key moving averages, the 20-day, 50-day, and 100-day exponential moving averages (EMAs), pointing to deteriorating momentum.

Sudeep Shah of SBI Securities noted that the Nifty traded within an 816-point range in August, its narrowest since March 2024, indicating market indecisiveness. The index currently finds support in the 24,300-24,250 range, with a potential downside to 24,000 if this support is breached. Resistance is expected between 24,650 and 24,700.

Bank Nifty mirrored this weakness, falling nearly 4% in August. A bearish "Dark Cloud Cover" pattern from July was validated by August's downward move, pulling the index below its critical EMAs. Immediate support lies between 53,600 and 53,500, with a breakdown potentially dragging it further to 52,400. Resistance is seen near the 54,500-54,600 zone.

Foreign Institutional Investors (FIIs) have remained aggressively bearish, particularly in the derivatives market. FIIs held net short positions worth Rs 7,559 crore in index options and Rs 1,239 crore in index futures. Their long-short ratio has fallen to a record low of just 8.3% at the start of the September derivatives series.

Historically, such low long exposures have often preceded market rebounds, a silver lining amid the gloom. However, the relentless outflows by FIIs, totaling nearly Rs 94,500 crore since July, continue to pressure markets. Fortunately, strong Domestic Institutional Investor (DII) inflows of Rs 1.56 lakh crore have acted as a counterbalance, preventing a deeper correction.

GST Council Meeting on September 3-4

Domestically, market participants are awaiting the crucial GST Council meeting scheduled for September 3-4 in New Delhi. Discussions are likely to center around rationalizing GST rates into a simplified two-rate structure, a reform long demanded by industry. Vinod Nair from Geojit Financial Services believes that sectors driven by domestic consumption, like FMCG and Infrastructure, could benefit from GST cuts and increased government spending. "India's resilience, supported by a strong Q1 GDP print, may provide a buffer against external headwinds," Nair noted, though he flagged rising fiscal concerns.

Stocks in Focus This Week

Sectorally, Nifty FMCG has shown relative strength, especially after the GST rate cuts, though broader consolidation persists. Select stocks in the Auto and Consumer Durable segments are also expected to benefit from increased consumption and robust rollovers into the September series.

However, the outlook remains muted for sectors like Private Banks and IT, where weak rollover data points to continued underperformance. CPSEs and Realty stocks also remain laggards.

Among stock picks, analysts remain bullish on counters such as Britannia, CG Power, Dalmia Bharat, Syrma SGS, Lux Industries, CarTrade Tech, Jamna Auto and Avantel, all showing strong technical setups despite broader market weakness.

Disclaimer

The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.