Pre-Market Update: Nifty 50, Sensex Likely to Open Lower; Gift Nifty Down 41 Points

Pre-Market Update at 7:40 AM: Indian benchmark indices are likely to open lower on Tuesday, September 1, as weak Asian markets, rising crude oil prices and renewed U.S.-Iran tensions weigh on investor sentiment. Gift Nifty was trading around 24,195, down nearly 41 points from the previous close of Nifty futures, signalling a negative start for the domestic market.

On Monday, the Sensex declined 307.24 points, or 0.40 per cent, to close at 76,957.27, while the Nifty 50 fell 95.25 points, or 0.39 per cent, to settle at 24,080.40. Selling pressure was visible across utility, IT and FMCG stocks.

Asian markets largely traded lower on Tuesday as renewed concerns over the Middle East conflict affected risk sentiment. Japan's Nikkei 225 declined 0.91 per cent, while the broader Topix remained largely unchanged. South Korea's Kospi and Kosdaq fell more than 1 per cent in early trade, while Australia's S&P/ASX 200 declined 0.36 per cent.

Gift Nifty was trading around 24,195, down nearly 41 points from the previous close of Nifty futures. The movement indicates that Indian equity benchmarks could begin Tuesday's session on a weak note.

U.S. stock futures remained largely muted after Wall Street ended lower in the previous session. Dow Jones Industrial Average futures rose 48 points, while S&P 500 futures gained less than 0.1 per cent. Nasdaq-100 futures were little changed.

Despite the weak final session, U.S. equities recorded monthly gains in August. The S&P 500 advanced 2.6 per cent, the Nasdaq Composite gained 3.9 per cent and the Dow Jones Industrial Average rose 1.3 per cent, marking its fifth consecutive monthly increase.

Renewed military tensions between the U.S. and Iran remain a key risk for global markets. U.S. President Donald Trump warned of further military action after the two countries exchanged direct attacks, raising concerns over energy supplies and the broader economic impact of the conflict.

The Strait of Hormuz remains a major focus for investors. The number of visible commodity vessels passing through the waterway fell to just five a day over the weekend, according to shipping data cited in the report. Diplomatic efforts involving mediators including Qatar and Oman have so far failed to make meaningful progress on reopening the crucial waterway, which handled around one-fifth of global oil supplies before the conflict.

Crude oil prices continued to rise amid concerns over potential supply disruptions. Brent crude futures climbed 56 cents, or 0.35 per cent, to USD 91.05 a barrel, while U.S. West Texas Intermediate crude gained 83 cents, or 0.13 per cent, to USD 86.59 a barrel. Brent had already risen 2.7 per cent in the previous session.

Higher crude prices could remain negative for India by putting pressure on inflation, the rupee and the country's external balances.

India's real GDP growth stood at 7.8 per cent in the April-June 2026 quarter, or Q1 FY27, compared with 6.9 per cent in the corresponding quarter of the previous year. However, growth moderated from 8.6 per cent recorded in Q4 FY26.

Manufacturing was a key driver, with the sector growing 9.2 per cent in Q1 FY27 compared with 8.3 per cent a year earlier. Construction grew 7.7 per cent, while electricity, gas, water supply and other utility services expanded 8.9 per cent.

The services sector grew 10 per cent during the quarter. Within services, financial, Real Estate, ownership of dwelling, IT and professional services grew 12.1 per cent.

Agriculture growth slowed to 3.6 per cent from 4.4 per cent in the year-ago quarter, while mining and quarrying contracted 2.4 per cent.

Nominal GDP growth stood at 10.3 per cent, while real GVA growth was 8.2 per cent. Economists, however, have flagged risks to future growth from a potentially deficient southwest monsoon, El Niño conditions and unfavourable base effects.

Foreign portfolio investors remained net sellers in Indian equities, offloading shares worth Rs 7,985 crore on Monday. Domestic institutional investors, however, provided support by purchasing shares worth Rs 4,589 crore.

The Indian rupee ended August near a four-week high against the U.S. dollar and recorded a monthly gain, supported by inflows linked to a stock index rejig and intervention by the central Bank.

Investors will also track India's August manufacturing PMI and monthly automobile sales during Tuesday's session. The manufacturing PMI consensus is around 52.9 to 53.5, depending on the survey series. Auto sales could trigger stock-specific movements across the automobile sector.

SAIL and LIC Housing Finance are in the F&O ban period on Tuesday. Securities enter the F&O ban when their open positions cross 95 per cent of the market-wide position limit.

Indian equities are likely to begin Tuesday's session with a cautious bias as rising crude oil prices and renewed U.S.-Iran tensions create fresh macroeconomic risks. At the same time, India's stronger-than-expected Q1 FY27 GDP growth provides a positive domestic backdrop. Investors will closely monitor crude prices, the rupee, institutional flows, manufacturing PMI, auto sales and developments in the Middle East for further market direction.

Disclaimer: The article is for informational purposes only and not investment advice.

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