Global Markets Remained Volatile While India Saw Biggest GST Reforms

In the week gone by, the global equity markets reflected mixed but resilient trends, shaped largely by evolving monetary policy expectations and divergent macroeconomic signals across regions. In this blog, we’ll know in detail what happened last week (September 1, 2025 to September 5, 2025) all across the globe.

US Market Gained on Rate Cut Outlook

In the United States, equity benchmarks advanced, with the S&P 500 and Nasdaq supported by softer labor data that reinforced bets on a near-term Federal Reserve rate cut. The Federal Reserve’s “Beige Book” painted a mixed picture of U.S. economic health, which appeared to underscore monetary policymakers’ concerns.

Payroll growth moderated while jobless claims edged higher, easing concerns of overheating and boosting risk sentiment. Technology stocks surged midweek, adding further momentum, while manufacturing activity also strengthened-S&P Global’s U.S. Manufacturing PMI rose to 53.0 in August, its strongest reading since May 2022, signaling improved operating conditions.

These factors suggest a soft landing scenario remains plausible, with implications for continued outperformance of growth equities and sectors sensitive to lower yields.

Eurozone Index’s Weaker Performance

In the Eurozone, the STOXX 600 edged lower, as weakness in semiconductors, software, and banks weighed on performance amid discussions around higher taxes on bank reserves. Inflation ticked up slightly to 2.1% in August, from 2.0% in July, though still below year-ago levels, reflecting sticky price pressures.

Industrial production slowed, with euro area output rising just 0.2% year-on-year, while producer price growth also decelerated. On the positive side, the Eurozone Composite PMI rose to a one-year high of 51.0, and UK activity accelerated with a Composite PMI of 53.5, reflecting stronger new orders.

The implication is a patchy recovery, where sluggish growth and lingering inflation keep the ECB cautious, favoring defensive positioning and quality stocks.

Japan’s Stronger Fundamentals

In Japan, the Nikkei gained nearly 1% as higher household income and spending reinforced domestic demand resilience. Composite PMI improved to 52.0 in August, driven by robust services growth, while manufacturing remained in mild contraction at 49.7.

These trends highlight the beginnings of wage-led reflation, supporting a gradual shift in Bank of Japan policy. Stronger domestic fundamentals imply opportunities in financials and consumption-linked sectors, though global rate volatility remains a risk.

China’s Market Gained

In China, the Shanghai Composite and Hang Seng posted modest weekly gains as policy support combined with improved activity data. The Composite PMI climbed to 51.9 in August, the strongest since November 2024, led by services, while the Caixin Manufacturing PMI returned to expansion at 50.5.

This points to stabilizing momentum, underpinned by targeted stimulus. For investors, the implication is a selective opportunity in the consumption and infrastructure sectors, though property sector risks continue to cloud the medium-term outlook.

India Gets a Pre-Diwali Gift

Back home, Indian stock markets posted moderately positive gains, supported by strong domestic macroeconomic momentum and targeted policy initiatives. Economic indicators reinforced this strength, with the manufacturing PMI jumping to a 17-year high of 59.3 in August and the services PMI reaching a 15-year peak of 62.9, driving the composite PMI to a 17-year high of 63.2.

These readings highlight broad-based expansion underpinned by resilient domestic demand. However, rising input and output prices point to mounting inflationary pressures, which could test the Reserve Bank of India’s policy stance in the coming months.

Sentiment also improved after the government announced GST 2.0 reforms, including rationalized tax slabs, which are expected to boost consumption ahead of the festive season.

Future Outlook

Looking ahead, risks remain from the United States’ imposition of a 50% tariff on Indian exports, which could dampen external trade and weigh on already subdued corporate earnings, particularly in export-oriented sectors such as textiles, metals, and manufacturing.

So, open a Demat account with SMC Global Securities and invest as per your investment objective and risk profile.

Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.