At ARKa Invest, we believe it’s important to look beyond the day’s numbers and understand the why behind the markets. On September 2, both benchmark indices, Sensex and Nifty, were trading lower after a volatile session.

• Sensex fell over 700 points from its day’s high, and was down 299 points (-0.37%) at 80,065.40 by 2:26 pm.
  
  

• Nifty slipped below the 24,550 mark, trading at 24,539.10 (-0.35%).
  
  

• Market breadth was still positive with 2,214 stocks advancing, against 1,497 declining, and 114 unchanged.

Here’s our breakdown of the three key drivers:

1. Weak Global Cues

Wall Street futures opened lower after the U.S. holiday on September 1. The Dow was down ~200 points, while Nasdaq and S&P 500 fell 0.64% and 0.5% respectively.

• Investors are closely tracking U.S. economic data this week that will shape expectations for the Federal Reserve’s September meeting.
  
  

• Markets are currently pricing in an 89% chance of a 25 bps rate cut, but if Friday’s U.S. jobs report signals a sharply weaker labour market, a larger 50 bps cut cannot be ruled out.
  
  

• Meanwhile, the dollar steadied near five-week lows and gold surged to record highs, suggesting a defensive investor positioning.

At ARKa, we see this as the classic tension between short-term global volatility and the medium-term policy clarity that will come once the Fed’s path is better defined.

2. Nifty’s New Expiry Cycle Adds Volatility

This week marked the first Tuesday expiry for Nifty futures and options, after NSE shifted from the long-standing Thursday cycle.

• Expiry days typically bring volatility, and today was no different.
  
  

• After hitting intraday highs—Sensex at 80,761 and Nifty at 24,756—both indices reversed into losses by afternoon trade.

For traders, this structural change is significant. Monday has now effectively become the “new expiry eve,” and will demand sharper positioning strategies.

3. Profit Booking Ahead of Key Policy Announcements

The market has rallied strongly in the last two sessions, with Sensex gaining over 900 points. Today’s dip likely reflects profit booking, as investors lock in gains ahead of important domestic policy cues.

• The GST Council meeting (Sept 3–4) is expected to announce consumption-boosting measures, including a potential 10% tax cut on 175 products spanning FMCG, autos, and consumer electronics.
  
  

• The Bank Nifty saw the steepest decline today, slipping nearly 600 points from its intraday high.

While short-term selling pressure is natural, policy-driven consumption revival could provide a fresh tailwind for Indian equities.

ARKa Invest Perspective

At ARKa, we view today’s market weakness as healthy consolidation rather than a shift in the long-term trend. India’s domestic growth story remains intact, supported by:

• Strong consumption potential if GST cuts materialize.
  
  

• Favorable macro conditions relative to peers, even as global uncertainty persists.
  
  

• A broad market where advances continue to outnumber declines.

Yes, the overhang of U.S. tariffs on Indian exports could temper upside in the near term, but the domestic demand cycle and structural reforms provide resilience.

For investors, we see this as a moment to stay disciplined, avoid chasing volatility, and align portfolios with long-term growth sectors rather than reacting to short-term swings.