ET NEWS

The proposed cut in goods and services tax (GST) rates is being welcomed by consumers, but companies across sectors are reporting a slowdown in sales as buyers wait for lower prices ahead of PM Modi's Diwali gift promise. The changes, if approved, may also create new challenges for India’s electric vehicle (EV) industry. Retailers say demand that usually picks up from Ganesh Chaturthi and Onam has remained muted this year, Times Of India (TOI) has reported. Many buyers are postponing purchases, expecting prices to fall once the GST Council finalises the rate cuts. “We are worried as the festive opening is normally a bumper period, running up to Dussehra and Diwali. But the news of a GST rate cut and impending reduction in retail prices is keeping buyers out of the market till the time a decision finally happens on the ground,” car and consumer goods companies and retailers told TOI's Pankaj Doval. Electronics retailers said shoppers are already asking about reduced prices on TVs, ACs and dishwashers. “We are already getting numerous queries from buyers about price cuts and when they will actually happen. Buyers say they will now wait for the price reduction before taking deliveries,” CEO of one of the top consumer goods companies told TOI. Auto dealers are facing a similar problem. Car bookings are being cancelled, and showrooms are witnessing weak conversions in states like Kerala and Maharashtra. What may get cheaper The government is likely to reduce GST on small cars and two-wheelers from 28% to 18%. For larger TVs, ACs and dishwashers, a similar tax cut is being anticipated. Final changes will depend on the GST Council’s decision. Saharsh Damani, CEO of the Federation of Automotive Dealers Association (FADA), said they have already taken up the matter with commerce minister Piyush Goyal and heavy industries minister HD Kumaraswamy. “We are already seeing pressure in Kerala and Maharashtra when it comes to sales conversions. Dealers are carrying high inventory due to the expected festive rush and if the stock is not liquidated within 60 days, banks will charge higher interest rates (on inventory finance) while slapping penalties. We are seeking help from banks, car and two-wheeler companies and govt. We have been assured of help by both the ministers,” TOI quoted him as saying. Relief for consumers, dilemma for companies While the cuts will help consumers save during the festive season, companies are stuck in a wait-and-watch mode. Brands such as LG, Samsung and Sony have seen sales slowing down as buyers hold back purchases. EV makers fear setback The tax revision may also affect India’s electric car market. Small petrol and diesel cars could move into the 18% slab, making them cheaper and narrowing the gap with electric vehicles, which are taxed at 5%. Analysts warn this could reduce the cost advantage EVs currently enjoy, especially in the entry-level hatchback segment. A report by HSBC Research says EV makers might lose momentum if internal combustion engine (ICE) cars become cheaper. Electric passenger vehicle sales rose 93% in July, led by Tata Motors, but the overall share of EVs in total car sales is still small—about 4.5%. (With inputs from TOI)

Foreign Institutional Investors (FIIs) continued their selling spree in August, offloading equities worth Rs 25,564 crore through the exchanges up to August 23. This took the total equity selling by FIIs this year up to that date to Rs 1,57,440 crore, according to market data.FIIs have not only been sellers in equities but have also trimmed positions in the bond market.According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, one of the key drivers behind this sustained selling is India’s relatively higher valuations compared with other global markets.He observed, “Since FIIs continue to invest through the primary market/ QIP route, the principal reason for selling through the exchanges is the high valuations in India relative to other markets, particularly emerging markets.”The selling has been broad-based, extending to banking and financials, which account for a significant portion of FIIs’ holdings.Vijayakumar said FIIs also offloaded shares in IT “on concerns of poor growth prospects and limited earnings visibility of this segment,” while they were consistent buyers in telecom and capital goods stocks.He further added that in the near term, “FIIs may reduce their selling since dollar is weakening responding to rate cut expectations from the Fed in September. The Fed chief Jerome Powell’s Jackson Hole speech indicates a rate cut in September.”Providing another perspective, Vipul Bhowar, Senior Director and Head of Equities at Waterfield Advisors, said that FIIs have been net sellers for most of 2025, a trend that has persisted into August.He noted, “Foreign Institutional Investors (FIIs) have been net sellers for most of 2025, and this trend continues in August, which has seen substantial outflows despite occasional daily inflows.”However, he pointed out that FIIs are still selectively participating in the markets, especially in the primary segment.“When we examine the data for secondary and primary market inflows, it becomes evident that FIIs are still participating in the primary market. This indicates their ongoing investment in new themes and businesses, while they are reducing their exposure to sectors that are experiencing slower growth,” Bhowar explained.Also read: Rekha Jhunjhunwala sold Nazara before gaming ban but Nikhil Kamath, Madhusudan Kela held on(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Markets ended higher for the second consecutive week, with benchmark indices Nifty 50 and Sensex advancing nearly a percent. Sentiment was buoyed by optimism around a GST rate overhaul from the outset and strengthened as the week progressed, though profit booking in the final session trimmed some gains.Meanwhile, foreign Institutional Investors (FIIs) continued their selling spree in August, offloading equities worth Rs 25,564 crore through the exchanges up to August 23. This took the total equity selling by FIIs this year up to that date to Rs 1,57,440 crore, according to market data.With this, analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ET Markets regarding the outlook for the Nifty and Bank Nifty, as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:What is your overall view on the markets and where do you think Nifty is headed?Last week, the benchmark index Nifty commenced trading on a robust note, buoyed by a series of encouraging macro and policy developments. The rally was primarily driven by S&P Global Ratings' decision to upgrade India’s sovereign outlook, which bolstered investor confidence in the country’s economic resilience. Additionally, Prime Minister Narendra Modi’s announcement of next-generation GST reforms, expected to be rolled out by Diwali, added further momentum. These reforms aim to simplify the tax structure and reduce the burden on consumers and MSMEs, thereby supporting broader economic growth.The bullish sentiment persisted through the week, propelling the index to a high of 25153 by Thursday. However, despite the strong upward move, Nifty struggled to decisively breach the 61.8% Fibonacci retracement level of the previous corrective phase (from 25669 to 24337). This technical resistance triggered profit booking on Friday, leading to the formation of a bearish candlestick with a pronounced upper shadow, a classic indication of selling pressure at elevated levels.On the daily chart, the index has formed an Evening Star candlestick pattern, which is typically viewed as a bearish reversal signal. This pattern, coupled with the rejection at a key Fibonacci level, suggests that the bulls may be losing grip, and a period of consolidation or a corrective move could be on the cards unless fresh positive triggers emerge. Most noteworthy, during this pullback rally, the RSI failed to cross the 60 mark.Going ahead, the zone of the 100-day EMA of the 24650-24600 level will act as important support for the index. While on the upside, the zone of 25050-25100 will act as a crucial hurdle for the index. Any sustainable move on either side will lead to a trending move in the index. Any expectations from the FIIs based on the Cash and FII Long-Short data?Despite a slight improvement in the FII long-short ratio—from 7.95% on August 13 to 10.70% on August 22, primarily due to some short covering—FIIs continue to hold significant short positions in index futures. Interestingly, the last time the long-short ratio fell below 10% was in March 2023, where it remained at these levels for three consecutive sessions. That period coincided with a market bottom, after which Nifty moved higher.This time, however, the ratio stayed below 10% for as many as 14 trading sessions before inching back above the mark over the past two days. Notably, recent positive developments, such as the S&P Global Ratings upgrade and GST rationalisation, have failed to meaningfully shift FII sentiment. Instead, concerns around the US–India tariff situation, a strengthening dollar against the rupee, and the jitteriness surrounding Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium—which could shape the September monetary policy outlook—have kept FIIs in a cautious “wait-and-watch” mode.Cash market flows mirror this sentiment. Since the beginning of August, FIIs have pulled out 25751 crore, following net outflows of 47667 crore in July. Over the past six weeks, FII activity has consistently reflected bearishness. Yet, despite this heavy selling, Nifty has corrected just 3.11% from its June 30 high of 25669. The resilience is largely due to strong domestic institutional investor (DII) support, with inflows of 66184 crore since August 1. Even in July, when FIIs sold 47667 crore, DIIs stepped in with purchases worth 60939 crore, cushioning the market from a deeper correction.Historically, the week leading up to monthly expiry often witnesses sharp swings in the long-short ratio, especially on expiry day itself. Should FIIs begin to cover shorts and resume buying in the cash market, Nifty could quickly regain momentum.What is your view on Bank Nifty?Bank Nifty continued to lag behind the broader market indices last week, reflecting persistent weakness in banking stocks. After hitting a weekly high of 56156, the index witnessed a sharp decline of over 1000 points, eventually closing at 55150, down 0.35% for the week. On the weekly chart, this move resulted in the formation of a sizeable bearish candle, highlighting the dominance of sellers during the week.The relative underperformance is clearly visible in the Bank Nifty/Nifty ratio chart, which has dropped to a 65-day low, underscoring the weakening strength of banking stocks compared to the broader market. Technically, the index is now trading below both its 20-day and 50-day exponential moving averages, with both averages trending downward — a sign of deteriorating short to medium-term momentum.Adding to the bearish tone, the daily RSI is on the verge of slipping below the 40 mark, indicating weakening internal strength and increasing downside risk. Unless there is a strong reversal or supportive news flow, the index may remain under pressure in the near term.Talking about crucial levels, the zone of 54900-54800 will act as immediate support for the index. Any sustainable move below the level of 54800 will lead to further correction in the index upto the level of 54300, followed by the 200-day EMA level of 53544. While on the upside, the zone of 55600-55700 will act as ian mportant hurdle for the index. What is the view on the consumer durable sector now, with the PM's announcement of a reduction in GST?The Nifty Consumer Durable index has shown strong outperformance following the Prime Minister’s announcement on GST reduction, which is expected to boost demand in the sector. The index surged nearly 4% last week, forming a sizeable bullish candle on the weekly chart, indicating renewed investor interest.Technically, the index has moved above its key moving averages on both daily and weekly timeframes, reinforcing the strength of the uptrend. The sentiment is further supported by improving momentum indicators, suggesting that the sector is likely to continue its outperformance in the short term, especially if the GST cut translates into improved consumer spending.Is the IT sector regaining strength now?The Nifty IT index showed early signs of recovery last week by closing above its 20-day EMA for the first time since July 2025, which is a positive technical development. However, despite this move, clear strength is still lacking.The overall structure remains tentative, as momentum indicators have yet to confirm a strong bullish reversal, and the index continues to underperform relative to other sectors. A sustained move above the key resistance level (36000), supported by volume and improving RSI, would be needed to confirm a meaningful trend reversal.Which other sectors are you focusing now?Nifty Auto: The index has delivered a strong breakout from a 13-week consolidation range on the weekly chart, signalling renewed bullish momentum. The index has significantly outperformed the frontline indices, surging over 5% in the past week, and reaffirming its leadership within the broader market. This outperformance is further validated by the Nifty Auto/Nifty ratio chart, which has climbed to a 43-week high, indicating sustained relative strength in the auto space. Technically, the index is trading well above its key moving averages on both the daily and weekly timeframes, reflecting a strong underlying trend. Adding to the bullish setup, the weekly RSI has crossed above the 60 mark for the first time since October 2024, a sign of strengthening momentum and growing investor interest in the sector. Given these technical confirmations, Nifty Auto is well-positioned to continue its outperformance in the short term, barring any major market-wide disruptions.Apart from this, Nifty Consumer Durable, Healthcare, Pharma, and India Tourism are likely to continue their outperformance. On the other hand, Nifty CPSE, PSE, and Private Banks are likely to underperform the frontline indices. Any well-placed stocks?Technically, Apollo Tyre, Mphasis, Nykaa, RCF, Dixon, ABFRL and Poonawalla Fincorp are likely to continue their northward journey.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Rupak De, Senior Technical Analyst at LKP Securities, sees Nifty sustaining its short-term uptrend as long as it holds above 24,800, with potential to climb towards 25,000–25,250. While Bank Nifty remains weak, he highlights UNO Minda and Lupin as bullish picks for the week, alongside a sell call on Axis Bank.Edited excerpts from a chat:After Nifty broke its 6-day-long winning streak on Friday, how bearish or bullish are you for the outlook ahead of the August series expiry next week?After several days of gains, Nifty took a breather on Friday, resembling a pause before the next leg of the up move. The index has been sustaining above the 50 EMA, confirming a short-term uptrend. On the downside, support is placed at 24,800; as long as it holds above this level, the trend is likely to remain strong with potential to rise towards 25,000/25,250.Nifty Bank erased all its gains during the week. What are your targets for the holiday-shortened week ahead?The Bank Nifty continues to underperform the Nifty, posting a lackluster performance during the week. On the daily chart, the index has broken below its recent consolidation and slipped under the 50 EMA. On the weekly chart, it has declined towards the 20 EMA, where it is expected to find support and attempt a reversal. However, if it falls below 54,950, it may extend the decline towards 54,500. On the higher side, resistance is placed at 55,500, and sentiment is likely to remain weak as long as the index trades below this level.Ever since Sebi's Jane Street order came out, the market has seen some impact on F&O volumes, particularly on expiry days. Once BSE and NSE expiry day swap comes into effect from September, what do you think could be the impact on volumes?Immediately after the ban, volumes saw a sharp decline of about 30%. While they eventually recovered to some extent, they have not returned to pre–Jane Street levels. In the short term, a negative impact on volumes may still be felt; however, in the long run, broader participation is likely to drive higher volumes as traders increasingly utilize both NSE and BSE expiries.And how would your Nifty trading strategy shift once we have Tuesday expiries? Do you think that the first few weeks of the shift could be stressful for traders?With the shift to Tuesday expiries, the trading strategy for Nifty options will need some adjustment. The first few weeks may indeed be stressful for traders as they adapt to the new cycle. Option premiums will likely see the sharpest time decay between Friday and Monday, making Mondays far more dynamic. As a result, Mondays will become the second most important day for Nifty option traders, with positions being actively reviewed or fresh trades initiated ahead of Tuesday’s expiry.Ola shares were among the top gainers in the week. Do you think the momentum will sustain?On the weekly chart, Ola has failed to close above the important average 20EMA on the weekly chart, this is a bit negative for the price trend. However, if the stock moves above 48 in the early days of the next week it might move towards 54/56. On the other hand, support is placed at 46.60. Give us your top ideas for the week aheadBuy UNO Minda at ₹1266 | Target: ₹1330 | Stop Loss: ₹1219The stock has moved higher after a brief consolidation on the daily chart, indicating renewed optimism. It is trading comfortably above the 50 EMA, confirming a bullish trend, while the RSI has entered a bullish crossover following the breakout. In the near term, the trend is expected to remain positive with potential upside towards 1,330. On the downside, support is placed at 1,219.Buy Lupin @ ₹1970 | Target: ₹2050 | Stop Loss: ₹1924Following a bullish harami pattern formation the stock moved up higher which is an indication of bullish reversal. The price has been sustaining above important 50EMA. The RSI is in bullish crossover. In the short term, the stock might move towards 2030-2050. While, a support is palced at 1924.Sell Axis Bank @ ₹1070 | Target: ₹1040 | Stop Loss: ₹1086The stock has slipped from its recent consolidation, suggesting growing bearish sentiment. Moreover, it has been trading below the 21 EMA on the daily timeframe. The RSI is on the verge of a bearish crossover. In the short term, the stock may drift lower towards 1,040, while on the upside, resistance is placed at 1,086.