US tariffs, macro data, FII selling and GST buzz: Indian markets brace for a volatile week

Besides, the commerce ministry has said that India and Australia have concluded another round of negotiations for a comprehensive free trade agreement to strengthen economic ties between the two countries.

Indian markets failed to hold the gains of the previous week amid profit booking at higher levels. In addition, positive global market cues also fail to boost optimism in the Indian markets.

Here are key things that could determine the direction for Indian markets this week.

Extension in tariff imposition

The US imposed an additional 25% tariff on Indian exports to the US and an extra penalty on buying oil from Russia. The tariffs will come into effect from Aug 27 as negotiations between the two trading partners. However, investors are optimistic about the breakthrough and some extension of the deadline of the tariff imposition. Any possibility of an extension of the deadline of talks between the two nations could boost investor sentiment.

FII selling

Foreign investors continued their selling spree in August, as they sold ₹22,000 crore worth of Indian equities to date in August. The selling has led to high underperformance of the Indian equities in comparison to their global counterparts. Experts believe any improvement on the tariff part and GST rationalisation could bring back FIIs to the Indian markets. Until then, the FII selling is expected to keep Indian markets under check.

Macro Indicators

Investors will likely monitor the GDP data and IIP data release on Friday, as it will determine the direction for Indian markets in the coming months. The Q1FY26 earnings showed a muted performance across the board, barring a few exceptions. India’s GDP growth amid the global tariff war is crucial and will be widely tracked.

GST buzz

The GST council is set to meet for a two-day meeting in the national capital, headed by the finance minister and other groups of ministers for rate rationalisation. According to the media reports, the new GST rates are expected to be implemented by September 22, ahead of the festival season starting with Navratri. Any key developments and news around the GST rate cuts are expected to decide the market direction, as it remains one of the major triggers for markets this week.

Technical indicators

NIFTY50 posted a bearish engulfing chart pattern on Friday and currently trades in the 24,870 to 25,000 level range. On Monday afternoon, the index is showing a doji chart pattern, indicating the absence of direction in the markets. Experts believe the 25,000 level will remain a crucial resistance for the week. On the downside, the 24,750 remains a crucial support for the index.