The Indian stock market reversed its early gains in Tuesday’s session to close lower as investors appeared to book profits at higher levels, causing the Nifty 50 and Sensex to shed 0.18% and 0.26%, respectively.
On the other hand, mid- and small-cap stocks continued to do well. The Nifty Midcap 100 and Nifty Smallcap 100 both gained 0.27% and 0.53% respectively. Markets opened higher, helped by Monday’s strong close, but heavy selling in financial stocks during the last hour pulled the market down.
Among sectors, banking stocks were the worst hit, with the Nifty Private Bank index falling 0.64%. This was followed by autos and pharma, which fell 2.12% and 1.64%, respectively.
Investors are also keeping an eye on the upcoming GST Council meeting on September 3–4. Reports suggest that the council may cut taxes by at least 10 percentage points on about 175 items, including shampoos, hybrid cars, and consumer electronics.
Globally, the US dollar regained strength from a five-week low. The important US jobs data due this week, which could affect expectations about whether the Federal Reserve will cut interest rates.
Last week’s US inflation report raised hopes for a rate cut, with markets now seeing a 90% chance of a 25-basis-point cut at the next Fed meeting. The US jobs report due later this week could influence how big that cut might be.
Meanwhile, US President Donald Trump said on Monday that India has offered to reduce its tariffs on US goods to “nothing,” while US Treasury Secretary Scott Bessent stated that despite current tensions with New Delhi, Washington still maintains confidence in the long-term relationship.
Bessent added that the two countries will eventually resolve their differences but criticized India for buying Russian oil and reselling it, which he said was helping fund Russia’s war in Ukraine.
