Key gauges end flat with negative bias amid fresh US-Iran tensions

Indian equity benchmarks ended flat with negative bias on Tuesday as elevated crude oil prices and fresh US-Iran tensions weighed on investor sentiment. Growing expectations that the US Federal Reserve could keep monetary policy tighter for longer also weighed on risk appetite across emerging markets.

Both Sensex and Nifty ended volatile session with minor cuts weighed down by selling pressure in Auto, Consumer Durables and Telecom stocks. However, gains in TECK, IT, Energy and select heavyweights helped limit the fall. Meanwhile, exchange data showed Foreign Institutional Investors (FIIs) continued their selling spree on August 31, 2026, offloading equities worth Rs 7,985.88 crore. 

Some of the important factors in trade:

Gross GST mop-up rises 15% to about Rs 2 lakh crore in August: Gross GST collections rose 14.8 per cent year-on-year to about Rs 2 lakh crore in August, driven by domestic transactions as well as imports. 

India manufacturing activity slips to five-year low at 52.8 in August: According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased from 53.5 in July to 52.8 in August. 

El Nino, global uncertainty pose risks to food inflation: 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.

Sitharaman credits govt reforms, economic management for 7.8% Q1 GDP growth: Finance Minister Nirmala Sitharaman has said that the reforms undertaken by the government, along with agile economic management, are bearing results, with real GDP growth coming in at 7.8 per cent in the April-June quarter of current financial year (Q1FY27). 

Global front: European markets were trading lower as flash data from Eurostat revealed Eurozone annual inflation accelerated to 3.3% in August 2026 from 2.9% in July, in line with market expectations. Asian markets settled mostly lower as rising U.S.-Iran tensions pushed Brent prices above $91 a barrel and added to worries about inflation and interest rates. 

Finally, the BSE Sensex fell 12.99 points or 0.02% to 76,944.28 and the CNX Nifty was down by 24.60 points or 0.10% to 24,055.80.      

The BSE Sensex touched high and low of 77,231.87 and 76,656.12, respectively. There were 13 stocks advancing against 17 stocks declining on the index.    

The top gaining sectoral indices on the BSE were TECK up by 1.44%, IT up by 1.24%, Energy up by 0.94%, Oil & Gas up by 0.87% and FMCG up by 0.37%, while Auto down by 1.41%, Consumer Durables down by 1.25%, Telecom down by 1.06%, Realty down by 1.03% and Capital Goods down by 0.95% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.90%, HCL Technologies up by 3.24%, Infosys up by 1.90%, Bharti Airtel up by 1.80% and Kotak Mahindra Bank up by 1.47%. On the flip side, Maruti Suzuki India down by 4.19%, Interglobe Aviation down by 2.86%, State Bank of India down by 2.83%, Bajaj Finserv down by 2.49% and Mahindra & Mahindra down by 2.38% were the top losers.

Meanwhile, India’s manufacturing sector continued expansion but at its slowest pace in five years in August 2026 amid softer demand conditions, which subsequently led to weaker increases in buying levels and stocks, as well as a mild decline in employment. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased from 53.5 in July to 52.8 in August. 

The survey report showed that new business increased at a marked rate but one that was the slowest for five years, amid challenging market conditions and subdued appetite for some products. Export sales also rose further, with gains reported from markets including Australia, Germany, mainland China, Spain, Thailand and the US. However, growth of international orders eased from July.

Production volumes at Indian manufacturers continued to rise strongly in August, but growth eased to its weakest level for five years. Besides, the softer sales environment was reflected in workforce and purchasing decisions. Manufacturing employment fell for the first time in two-and-a-half years, though the rate of decline was only fractional. Meanwhile, input cost pressures continued to ease, and manufacturers responded by raising selling prices more modestly.

CNX Nifty touched high and low of 24,143.15 and 23,952.55, respectively. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were ITC up by 4.34%, Bharti Airtel up by 3.60%, Adani Ports &SEZ up by 3.41%, HCL Technologies up by 2.99% and Reliance Industries up by 2.51%. On the flip side, Shriram Finance down by 4.58%, Maruti Suzuki India down by 4.41%, Nestle India down by 3.90%, Max Healthcare down by 3.75% and Interglobe Aviation down by 3.48% were the top losers. 

European markets were trading lower; UK’s FTSE 100 decreased 90.22 points or 0.83% to 10,734.04, France’s CAC fell 23.5 points or 0.28% to 8,311.00 and Germany’s DAX lost 255.01 points or 0.98% to 26,003.10. 

Asian markets settled mostly lower on Tuesday as renewed US-Iran tensions and attacks near the Strait of Hormuz pushed Brent crude prices above $92 per barrel, and raised concerns about inflation and interest rates hike. Chinese and Hong Kong markets declined, even as investors anticipated more substantive economic stimulus and policy support from Beijing following recent soft data. However, South Korea's Kospi gained as stronger-than-expected exports and robust semiconductor demand linked to the artificial intelligence boom supported technology stocks.