Domestic markets are likely to remain volatile amid mixed signals from the US despite global trends presenting a positive opening.
Though the relatively conciliatory tone by the US President Donald Trump towards India and the positive response from the Prime Minister Narendra Modi may keep marketmen happy, the proposed HIRE Act against Indian IT companies may spoil the sentiment. This two-step-backward, one-step forward in India-US relations will keep marksmen on tenterhooks.
Gift Nifty at 24,916 against Nifty futures at 24,847.70 signals a positive opening for.
HIRE Act
introduced by the Ohio Republican Senator Bernie Moreno, aims to slap a tax on US companies that outsource jobs overseas.
The new Bill, if passed by policymakers, is set to disrupt the growth of India’s burgeoning services sector and threatens the cost arbitrage enjoyed by service providers here, especially in the tech sector. The HIRE Act proposes a 25 per cent tax on “outsourcing payments,” which is defined as any “premium, fee, royalty, service charge, or other payment made in the course of a trade or business [by any US person] to a foreign person, with respect to labour or services, the benefit of which is directed, directly or indirectly, at consumers located in the US.” The outsourcing payments will also not be deductible for tax purposes, it adds.
GST reforms
Meanwhile, the GST 2.0 reform initiative will keep the market buoyant.
Enkay Global Research said its monthly review of macro data suggests that a growth recovery is not yet visible, though some silver linings have emerged. “We remain confident, however, about an improved H2FY26, especially after the GST reform announced on 3 September 2025. Though the market response was weak, much of this was priced-in in the 2 per cent Nifty rally since the Prime Minister’s GST announcement on 15 August 2025. We remain positive on the markets and uphold our September 2026 Nifty target of 28,000, while we believe autos are the best way to play the GST reform,” it said.
Continuous selling by foreign portfolio investors in Indian equities haunts Indian investors.
FPI selling
Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said: FIIs continued their selling spree in the first week of September having sold equity for ₹5,666 crore in the cash market. This takes the total FPI selling in 2025 so far up to ₹1,76,606 crore. “Coming on the back of selling of ₹121210 crore in 2024, the FPI selling is, indeed, massive. Sustained massive DII buying is enabling FPIs to encash at high valuations and take the money to cheaper markets such as China, Hong Kong and South Korea. Even the optimism generated by the GST reforms didn’t restrain the FPIs, who have sold on every day of September so far.
Apart from the high valuations, uncertainty related to the Trump tariff is also weighing on FIIs. The market is a bit concerned about what Trump might do next. There are some concerns that the unpredictable US president may even impose tariffs on IT services from India. The continuing uncertainty is impacting market sentiments,” it said.
Meanwhile, the F&O market signals a cautious outlook.
Ponmudi R, CEO, Enrich Money, said: “The options market reflects a cautious undertone, with total OI in Nifty options at 21.13 crore contracts. Puts (16.22 crore) significantly outnumber Calls (4.91 crore), indicating that traders are either preparing for a downside move or actively hedging their positions. The 25,000 strike holds a heavy Call OI of about 2 crore contracts, making it a strong resistance zone, while the highest Put OI at 24,500 signals firm support. This positioning suggests the Nifty is likely to remain range-bound between 24,500 and 25,000, unless a decisive breakout occurs.
Global stocks, led by Japan are up in early deals on Monday despite the resignation of Japan’s premier. Most Asia-Pacific stocks are up in the region of 0.25-1.5 per cent.