Last week ended on a positive note as the Reserve Bank of India’s GDP analysis for the April-June quarter showed a stronger-than-expected growth of 7.8 per cent.
The first week of September will however be more keenly watched and event-heavy with the GST Council meeting scheduled for September 3-4, in which the body is expected to spell out the much-anticipated changes in the GST structure currently in place.
Indian equity markets this week would keenly track the upcoming GST Council meeting as well as important macroeconomic data announcements and trading activity of foreign investors for further movement, analysts said.
Also affecting stocks will be developments related to tariff negotiations, global market trends and auto sales data.
"Looking ahead, India's resilience, supported by strong Q1 GDP print driven by government spending and policy measures, may provide a buffer against external headwinds, though fiscal concerns remain. A resolution of tariff disputes could act as a key catalyst for market sentiment," observed Vinod Nair, Head of Research, Geojit Investments Ltd.
Also Read: New GST reforms will likely drive up stock markets this week
Even though a high 50 per cent tariffs on Indian goods imposed by US President Donald Trump came into effect on August 27, there remain hopes that a resolution may be on the charts.
"This week will be event-heavy, marking the start of a new month with several high-frequency indicators due for release. Investors will closely track auto sales data, along with HSBC manufacturing, services, and composite PMIs,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
"Additionally, the GST Council meeting will be a key focus, with expectations building around an accelerated implementation of proposed reforms. These events are likely to set the near-term tone for risk sentiment," he added.
Markets would also track the rupee-dollar trend and movement in crude oil prices, experts noted.
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, agreed on the GST Council meeting taking the cake when it comes to importance of events.
"On the domestic front, focus will be on the GST Council meeting scheduled for September 3-4 to discuss the proposed GST reforms. Additionally, markets on Monday would react to India's GDP data released after market hours on Friday,” he stated.
Last week, the BSE benchmark dropped 1,497.2 points, or 1.84 per cent, and the Nifty declined 443.25 points, or 1.78 per cent.
"This week will be crucial with a slew of domestic and global data releases. On the domestic front, investors will closely watch auto sales numbers, along with key PMI data. Globally, PMI prints and other major macroeconomic indicators, particularly the US non-farm payrolls data, will remain in focus," opined Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.
While Foreign Institutional Investors (FIIs) have turned net sellers, Domestic Institutional Investors (DIIs) have provided strong support, Gour said.
"The market's trajectory will largely depend on clarity regarding tariff negotiations and upcoming domestic policy measures, including potential GST rationalisation discussions," Puneet Singhania, Director at Master Trust Group, said.
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