The Indian stock market is expected to be influenced by a number of key factors in the coming week, including auto sales data and the GST Council meeting. The benchmark indices, Sensex and Nifty 50, ended lower on Friday, August 29, marking the third consecutive session of losses, primarily due to worries about the economic impact of tariffs.

1. Auto Sales Data

The Society of Indian Automobile Manufacturers (SIAM) has released data indicating that Maharashtra and Uttar Pradesh led state-wise vehicle sales in Q1 FY26. Maharashtra took the lead in passenger and commercial vehicle sales, holding the highest market share in passenger vehicles at 11.8%, followed by Uttar Pradesh at 11.3%. Uttar Pradesh, however, led in two-wheeler and three-wheeler sales. Overall passenger vehicle sales in India totaled 1.01 million units, with the Western Zone leading sales at 3.21 lakh units. Commercial vehicle sales reached 2.23 lakh units, again led by the Western Zone with 0.77 lakh units.

However, recent data shows that car sales by Indian automakers to dealerships dropped to an 18-month low in June, which was attributed to sluggish demand in urban markets. Automakers dispatched 312,849 units to dealers during the month, a 7.4% decrease compared to the previous year. Passenger vehicle sales rose by just 2% in FY25, a significant drop from the 8.7% growth in FY24 and 27% in FY23.

2. GST Council Meeting

The 56th GST Council meeting is scheduled for September 3-4 in New Delhi. The council will discuss reforms, including potential revisions to the GST rate structure. Expectations include a possible reduction of the four-tier system (5%, 12%, 18%, and 28%) to focus on two primary tax rates: 5% and 18%. Also, there may be a 40% tax rate implemented that targets "sin goods," like ultra-luxury cars. The agenda includes deliberations on introducing pre-filled returns and automated GST refunds.

3. US Tariffs

The United States has doubled tariffs on Indian goods, raising them as high as 50% due to India's continued imports of Russian oil. These tariffs, the highest among U.S. trading partners alongside Brazil, could negatively impact exports, including textiles, leather goods, and chemicals. Sectors likely to be directly affected include textiles, equipment manufacturers, metals, auto, and seafood, while IT and pharma may face sentimental pressure.

4. Economic Growth

India's economy grew by 7.8% in the April-June quarter, exceeding economists' expectations. Gross Value Added (GVA) grew by 7.6%. Private consumer spending, which constitutes about 57% of GDP, rose by 7.0% year-on-year. Despite the tariff increase, India's Chief Economic Adviser is maintaining a growth range of 6.3%-6.8% for the full year.

5. Global and Domestic Cues

Global factors, particularly trade tensions and US tariffs, are expected to influence market sentiment. Domestic cues, such as policy measures and government spending, may provide a buffer against external headwinds. Investors will closely monitor upcoming domestic and US macro data, including PMI prints, jobless claims, payrolls, and unemployment figures.

In conclusion, the Indian stock market faces a mix of domestic and global factors in the coming week. Positive economic growth and potential GST reforms could support market sentiment, while auto sales data, US tariffs, and global trade tensions could create volatility.