3rd September Market Report
03/09/2025
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Market Recovery Gains Momentum with Eyes on GST Reforms and Global Stability
Quick Market Snapshot
Market Sentiment & Overview
Indian markets have shown constructive recovery, with investors cautiously optimistic ahead of the 56th GST Council meeting on September 3-4, anticipating reforms that could unlock growth across sectors. The Fear Index at 32.77 points to investor wariness but also reflects an environment to consider well-timed entries. The India VIX’s decline to 11.29 reinforces expectations of a relatively calm trading landscape in the near term.
Globally, Asian indices started the day mixed; Tokyo’s Nikkei gained 0.31%, South Korea’s KOSPI rallied 0.74%, while Hong Kong’s Hang Seng slipped 0.30%. European markets showed modest gains with Germany’s DAX +0.57% and FTSE 100 +0.10%. US futures were subdued post-Labor Day holiday, indicating a cautious stance ahead of forthcoming inflation and economic data.
Domestic institutional activity has been a positive force with DIIs supporting the market amid continued foreign outflows. The rupee traded near a record low at 88.20, affected by global dollar strength and trade uncertainties, while India’s 10-year government bond yield inched up modestly to 6.58%. Oil prices remained steady above $68 for Brent crude, and gold held firm as investors balanced inflation concerns with risk appetite.
Indian Markets Deep Dive
The Nifty 50 index closed at 24,625.05, up 0.81% from the previous session, recovering after support near 24,420 held firm. The Sensex mirrored this move, registering a 0.70% gain to close at 80,364.49. Bank Nifty ended at 54,002.45, up 0.65%, showing a green candle but still trading below the 20, 50, and 100-day EMAs, suggesting the upward momentum is nascent.
Sector-wise, power, pharma, and consumer discretionary sectors led gains.
Technically, Nifty’s key support is at 24,420 with immediate resistance near 24,700-24,800. The RSI improved to 45.5 but MACD remains in a negative crossover. Bank Nifty’s put-call open interest indicates strong support at 54,000 and resistance at 56,000. Advances outnumbered declines, reflecting broad market participation.
FII selling persisted with Rs 44,966 crore outflows over the last 30 days, while DIIs bought Rs 95,986 crore, highlighting domestic confidence. The rupee’s slight up-move of 0.12% to 88.10 against the USD underscores cautious forex sentiment.
Global Markets Roundup
Asian markets opened mixed Tuesday: Japan’s Nikkei 225 rose 0.31%, South Korea’s KOSPI surged 0.74%, offset partially by Hong Kong’s Hang Seng, down 0.30%. European indices showed mild strength with DAX +0.57%, FTSE +0.10%, and CAC 40 +0.05%. US indices closed lower on Monday (S&P 500 -0.64%, Dow Jones -0.20%, Nasdaq -1.15%) in cautious trading amid geopolitical uncertainties and anticipation of economic data releases.
Global investors await August US inflation figures and ECB policy updates as potential drivers for major moves. Meanwhile, tech and AI sectors are gaining traction globally, providing selective sectoral support.
Commodities Market
Oil prices stabilized with Brent crude above $68 per barrel and WTI crude near $65, supported by balanced supplies and anticipation of OPEC+ production decisions. Gold remained steady near $1,965/ounce, reflecting safe-haven demand amid inflation worries.
Industrial metals such as copper and aluminium showed mild strength due to supply tightness and steady demand outlooks. Agricultural commodities experienced weather-related supply adjustments, influencing wheat and soybean prices.
These commodity trends suggest ongoing inflation pressures that may impact currency and equity markets in coming weeks.
Forex Market Analysis
USD/INR traded slightly higher at 88.10 (+0.12%), close to a record low, amid persistent dollar strength and concerns over trade balance. The Dollar Index (DXY) remains elevated, mirroring Fed’s firm monetary policy stance.
Major currency pairs held steady, awaiting key economic data globally. Emerging market currencies showed resilience but face headwinds from global liquidity and risk factors. Technical support for USD/INR remains near 87.80, with resistance at 88.50, indicating limited near-term range-bound movement.
Cryptocurrency Update
Bitcoin is trading near $111,000, reflecting a 2.4% gain over 24 hours, showing renewed institutional buying interest. Ethereum stabilized around $4,337 after recent volatility, with modest declines of about 1.9%.
The total crypto market capitalization remains strong, supported by stable on-chain metrics and moderate whale movement. Regulatory clarity and fund inflows to DeFi and NFT sectors are cautious but positive signals. Fear & Greed crypto indices suggest neutral to mildly cautious market mood.
Economic Calendar & Events
Key events include the Prime Minister inaugurating Semicon India 2025 and the 56th GST Council Meeting slated for September 3-4, both expected to influence market sentiment and sectoral performance.
Globally, investors focus on US inflation data and ECB announcements as critical for setting future monetary conditions and risk appetite.
Advanced Technical Analysis
Nifty maintains key support at 24,420 points, with resistance near 24,700-24,800. Volume confirmations highlight selective buying interest in defensives and consumption sectors. RSI improved to 45.5, signaling strengthening momentum, but MACD remains bearish.
Options data show a put-call ratio of 1.14, indicating elevated hedging activity on the downside. Max Pain settles near 24,500, aligning with technical support. Futures open interest suggests cautious positioning with moderate rollover activity.
Options & Derivatives Analysis
Put-call ratios above 1 signal dominant bearish hedging; peak open interest is at 24,500 puts in Nifty and 56,000 calls in Bank Nifty, marking key support and resistance levels.
Gamma exposure remains moderate, suggesting limited short-term volatility spikes but vigilance is warranted around option expiry. Futures rollovers reflect steady cost of carry amid event risk and market consolidation.
Fundamental Analysis
Economic indicators reveal inflationary pressures balanced by improving domestic consumption and corporate earnings. Pharma, power, and finance sectors report robust results, while autos face supply challenges.
Valuations remain attractive versus global peers, making Indian markets favorable for medium- to long-term investors focused on structural growth themes. Risks include foreign selling, trade uncertainties, and commodity volatility.
Investment Strategy & Outlook
The short-term outlook is cautiously optimistic. Investors are advised to buy selectively near critical technical supports (24,400–24,500 in Nifty) focusing on consumption, energy, and financials.
Risk management via option hedging and stop-losses is recommended given event risks from GST and global economic data. Diversification remains key to mitigating cross-asset volatility.
Key Takeaways & Action Items
Disclaimer: Analysis is for informational purposes only. Market conditions can change rapidly. Investors should conduct personal due diligence before making decisions.
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