Benchmarks likely to make negative start amid rising crude oil prices

Indian equity markets are likely to make a negative start on Tuesday, amid rising crude oil prices following the resumption of hostilities between the US and Iran in West Asia. Traders are likely to adopt wait-and-watch approach ahead of the release of the final HSBC Manufacturing PMI data later in the day. Sentiments may also remain subdued as Foreign Institutional Investors (FIIs) continued their selling spree on August 31, 2026, offloading equities worth Rs 7,985.88 crore.

Some of the key factors to be watched:

India’s GDP growth surges to 7.8% in Q1FY27: 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.

Index of services production shows 8 sub-sectors record double-digit growth in June: The Ministry of Statistics & Programme Implementation (MoSPI) report said that the index of services production released for the third time on a trial basis showed eight of 19 service categories recorded double-digit growth in June this year.

FY27 Fiscal Deficit hits 26.8% of target by July: Data released by the Controller General of Accounts (CGA) showed that the central government's fiscal deficit for 2026-27 stood at 26.8 per cent of the full-year target at the end of July. The deficit was at 29.9 per cent of Budget Estimates (BE) of 2025-26 for the first four months of the previous financial year.

Govt considers easing FDI norms in Defence sector: The government is considering liberalisation of foreign direct investment (FDI) norms in the defence sector to further attract overseas investors. The government is considering liberalisation of foreign direct investment (FDI) norms in the defence sector to further attract overseas investors.

El Nino Threatens Food Inflation, Rabi Crops: A finance ministry report said an intensifying El Nino, expected to peak late 2026, warrants a cautious outlook on domestic food inflation and agricultural output, including the upcoming Rabi crops, particularly wheat and mustard.

Global front: The US markets ended lower on Monday, as investors weighed rising oil prices amid renewed tensions in the Middle East. Asian markets are trading mostly lower on Tuesday, following the broadly negative cues from Wall Street overnight.

Back home, Indian equity benchmarks ended lower on Monday following weak global market cues, as investors remained cautious after the fresh escalation in the US-Iran war and subsequent rising in crude oil prices. Foreign fund outflows along with the renewed fears of interest rate hike by the US Federal Reserve also dented investors' sentiment. Finally, the BSE Sensex fell 307.24 points or 0.40% to 76,957.27 and the CNX Nifty was down by 95.25 points or 0.39% to 24,080.40.    

Some of the important factors in trade: 

India remained resilient despite global turmoil: Finance Minister Nirmala Sitharaman said India has remained resilient amid global uncertainties by continuously monitoring developments abroad while keeping the country’s own requirements in focus. 

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

Argentina commits to easing entry barriers for Indian pharmaceutical sector: The Commerce Ministry has said that Argentina has committed to easing barriers to facilitate entry of Indian pharmaceutical sector in the South American nation.