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Geopolitical tensions, elevated crude oil prices, rising bond yields weigh on Indian markets
Sep-04-2026

Indian markets extended their losing streak for fourth consecutive week and ended with around 1% cut amid fresh escalation in US-Iran conflict, elevated crude oil prices and rising global bond yields, which stoked inflation fears. Brent crude oil hovered above $95/bbl, while WTI crude oil traded near $90/bbl. Traders remained cautious amid mixed domestic macroeconomic data.

Some of the major developments during the week are:

Industrial growth of India falls to 6.7% in July: The MoSPI in its quick estimates has shown that industrial growth fell to 6.7% in July 2026 (Base 2022-23=100) from a revised growth of 8.8% in June 2026 amid contraction in mining activity and slowdown in manufacturing growth.

India manufacturing activity slips to five-year low at 52.8 in August: India’s manufacturing sector continued expansion but at its slowest pace in five years in August 2026 amid softer demand conditions. HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased from 53.5 in July to 52.8 in August.

India’s GDP growth surges to 7.8% in Q1FY27 despite global headwinds: India's Gross Domestic Product (GDP) growth surged to 7.8% in April-June quarter (first quarter) of current fiscal year 2026-27 (Q1FY27), from 6.9% in Q1FY26. The Indian economy has sustained growth momentum despite global headwinds.

Govt’s gross GST collections rise 14.8% to Rs 1,99,853 crore in August: The government data has showed that gross goods and services tax (GST) collections rose 14.8% to Rs 1,99,853 crore in August 2026 as compared to Rs 1,74,116 crore in August 2025 driven by both domestic transactions and imports.

India’s services sector gains momentum with PMI at 54.1 in August: India’s services sector expanded further in the month of August, as demand conditions remained supportive. HSBC India Services PMI Business Activity Index rose to 54.1 in August from 53.3 in July.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 749.08 points or 0.97% to 76,515.43 during the week ended September 04, 2026. On the sectoral front, S&P BSE Auto was down by 2,330.82 points or 3.66% to 61,406.38, S&P BSE Consumer Durables was down by 1,822.73 points or 2.80% to 63,243.97, S&P BSE Consumer Discretionary Goods & Services was down by 214.04 points or 2.08% to 10,060.99 and S&P BSE Capital Goods was down by 1,646.40 points or 2.07% to 77,868.58 were the top losers, while S&P BSE Oil & Gas was up by 191.97 points or 0.74% to 26,169.67 and S&P BSE Realty was up by 15.12 points or 0.21% to 7,092.98 were the only gainers on the BSE.

NSE movement for the week

The Nifty slipped 277.95 points or 1.15% to 23,897.70. On the National Stock Exchange (NSE), Nifty Next 50 lost 1278.25 points or 1.72% to 72,880.90, Nifty IT was down by 586.60 points or 1.88% to 30,695.10, Nifty Mid Cap 100 decreased 990.45 points or 1.55% to 63,079.05 and Bank Nifty was down by 126.65 points or 0.22% to 57,369.65.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 128,800.88 crore and gross sales of Rs 137,532.21 crore, leading to a net outflow of Rs 8,731.33 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 8,926.09 crore against gross sales of Rs 9,369.89 crore, resulting in a net outflow of Rs 443.80 crore. In hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 1,145.20 crore and gross sales of Rs 3,690.35 crore, leading to a net outflow of Rs 2,545.15 crore.

Industry and Economy

The Finance Ministry, in its Monthly Economic Review (MER), has said that an intensifying El Nino, which is expected to peak in late 2026, warrants a cautious outlook on domestic food inflation and agricultural output, including the upcoming rabi crops, particularly wheat and mustard. The ministry flagged the external environment as the key source of uncertainty and said that, going forward, there is a need to closely track three global developments: the sovereign bond market worldwide; the potential rise in the global average inflation rate due to higher prices of electronic goods and food items; and investment capital flows from across the world, including developed nations.

Outlook for the coming week

Indian benchmark indices ended lower in the passing week as higher crude oil prices, foreign fund outflows continued to weigh on investor sentiment. Crude oil prices moved higher amid escalating hostilities between the US and Iran in the Middle East.

In the coming week, on the economic data front, market participants will be eyeing Foreign Exchange Reserves data to be released on September 11. Meanwhile, India will be hosting the 18th BRICS Summit on September 12-13, 2026 at Bharat Mandapam in New Delhi. The broader summit-related programme will begin from September 11. Moreover, the Confederation of Indian Industry (CII) has scheduled its Annual Infrastructure Summit for September 9.

On the global front, investors would be eyeing economic data from United States (US) starting with Redbook and Consumer Inflation Expectations on September 08, followed by API Crude Oil Stock Change, US producer prices, Initial Jobless Claims, Existing Home Sales and EIA Crude Oil Stocks on September 10, Core Inflation Rate, Michigan Consumer Sentiment and Baker Hughes Oil Rig Count on September 11.

Top Gainers 

  • Coal India up by 3.84% was the top gainer on Nifty for the week - Coal India caught investors’ attention after the company reported 5.50% growth in its total coal supplies at 60.60 MT in the month of August FY27 as compared with 57.40 MT supplied during the corresponding month last year. Besides, it has sufficient inventory, to support power generation requirements in the coming months. It has around 76 MT of coal currently available at its pitheads. 
  • Reliance Industries up by 3.10% was another top gainer on Nifty for the week - Reliance Industries traded higher after its subsidiary -- Jio Platforms received the observation letter on the Draft Red Herring Prospectus (DRHP) filed for its proposed Initial Public Offer (IPO) from the Securities and Exchange Board of India (SEBI).

Top Losers 

  • Adani Enterprises down by 7.29% was the top loser of the week on Nifty - Adani Enterprises came under pressure as traders opted to book profits following recent gains made by the stock after multiple brokerages indicated bullish outlook for the stock. Besides, worries over MSCI index reshuffle weighed on investor risk sentiment, despite hike in Adani Enterprises’ weightage in the index.
  • Eicher Motors down by 5.80% was another top loser of the week on Nifty - Eicher Motors traded lower after its August sales numbers failed to match street expectations. The company’s motorcycle division has posted monthly sales of 1,26,479 units in August 2026, an 11% growth over 1,14,002 units sold in the same month last year. Further, its JV -- VE Commercial Vehicles posted 17.68% rise in total sales at 8,434 units (Inclusive of EVs) in August 2026.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 24,188.30 on September 1 and lowest level of 23,786.80 on September 2. On the last trading day, the Nifty closed at 23,897.70 with weekly loss of 277.95 points or 1.15 percent. For the coming week, 23,726.90 followed by 23,556.10 are likely to be good support levels for the Nifty, while the index may face resistance at 24,128.40 and further at 24,359.10 levels.

US Market

The US markets traded higher during the week as Federal Reserve Governor Christopher Waller suggested that another rate hike may not be necessary if upcoming inflation data remains moderate. Some support also came with value buying at the lower levels.

Some of the major developments during the week are:  

US manufacturing growth slows in August: ISM Manufacturing PMI fell to 54.6 in August 2026 from July’s near four-year high of 55.6, below market expectations of 55.2. The reading marked eighth consecutive month of expansion in manufacturing activity.

US factory orders rise more than expected in July: New orders for US manufactured goods rose 0.9% month over month in July 2026, rebounding from a revised 0.2% decline in June and beating market expectations of a 0.6% increase.

US trade gap largest in 16 months: Trade deficit widened to $88.6 billion in July 2026, marking largest gap since March 2025, compared with $71.1 billion in June. Exports declined 2.1% to $310.7 billion, Imports rose 2.8% to $399.3 billion in July.

US productivity growth unrevised in Q2: US nonfarm business-sector labor productivity rose 1.4% in the second quarter of 2026, unchanged from the preliminary estimate, following a 0.8% increase in the first quarter.

US services growth accelerates: The ISM Services PMI rose to 55.4 in August 2026 from 54.1 in July, beating forecasts of 54.3. The reading pointed to the strongest gain in the services sector in six months.

European Market

European stock markets remained sluggish during the passing week, as investors made cautious moves, looking ahead to U.S. nonfarm payrolls data for clues on Federal Reserve's interest rate path.

Some of the major developments during the week are:

Eurozone unemployment rate steady at 6.4%: The jobless rate stood at 6.4 percent in July, unchanged from June. In the same period last year, the unemployment rate was 6.3 percent.

Eurozone inflation strongest since 2023: Inflation advanced to 3.3 percent in August, as expected, from 2.9 percent in July. The rate was the highest since September 2023, when inflation was 4.4 percent.

Eurozone manufacturing growth fastest since 2022: The manufacturing Purchasing Managers' Index hit a 51-month high of 52.7 in August from 51.9 in July. The reading was slightly down from the flash estimate of 52.8.

Eurozone private sector logs robust growth: The final composite output index posted 52.0 in August, unchanged from July's eight-month high and slightly down from the flash score of 52.1.

Eurozone producer price inflation accelerates: The Eurostat reported that producer prices increased 5.8 percent in July after climbing 4.6 percent in June and 5.9 percent in May.

Asian Market

Asian markets, barring Singapore's Straits Times Index (STI), traded in red during week as traders remained on sidelines ahead of U.S. nonfarm payrolls data for clues on Federal Reserve's interest rate path. Traders also assessed renewed tensions in Middle East.

Some of the major developments during the week are:

Japan's household spending falls in July: Japan's household spending declined 3.6% y-o-y in July 2026, deepening from a 3.3% drop in the prior month and underperforming market expectations for a 1.6% fall.

Japan Services PMI improves to 52.5 in August: Japan’s S&P Global Services PMI Business Activity Index rose to 52.5 in August 2026 from the flash reading of 52.3 and July’s 51.2. 

Japan consumer confidence rises to 6-month high: Japan's consumer confidence index increased to 35.5 in August 2026 from 34.9 in the previous month, beating market expectations of 35 and reaching its highest level since February.

China’s RatingDog Services PMI jumps to 51.4 in August: The RatingDog China General Services PMI rose to 51.4 in August 2026 recovering from a 22-month low of 50.4 hit in July, and surpassed market forecasts of 50.6. 

Hong Kong’s private sector slips into contraction in August: The S&P Global Hong Kong SAR PMI fell to 49.5 in August 2026 from 51.0 in July, signaling a renewed deterioration in private sector business conditions.
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