Indian equity benchmarks experienced a muted trading session on Wednesday, as gains in some sectors were offset by losses in others, ahead of a key Goods and Services Tax (GST) Council meeting. At 10:16 a.m. IST, the NSE Nifty 50 was up 0.06% to 24,594.7, and the BSE Sensex added 0.06% to 80,194.85.

IT Sector Dragged Down by Weak U.S. Data

The IT index experienced a decline of 0.7% following the release of data indicating a contraction in U.S. manufacturing for the sixth consecutive month in August. This is a concerning signal of economic weakness in the world's largest economy, as IT companies derive a significant portion of their revenue from the U.S..

Broader Market Gains Capped

Despite the weakness in the IT sector, broader markets demonstrated positive momentum. Small-cap and mid-cap stocks gained approximately 0.7% and 0.4%, respectively. Fourteen of the 16 major sectors were in the green. The metal index led sectoral gains, rising by 1.3%. Analysts at CLSA anticipate a rise in steel prices, aligning with global trends and strong seasonality, suggesting that the worst may be behind the metal sector. They also noted that Indian metal companies could benefit from China's plan to tackle excessive competition and low prices.

GST Council Meeting in Focus

The GST Council meeting is a key event that investors are closely watching. Expectations of consumption-boosting tax cuts have kept auto and consumer shares trading flat. According to Rajesh Bhosale, an equity technical analyst at Angel One, the benchmark index is in a "corridor of uncertainty," with investors awaiting the GST Council meeting, which could trigger sectoral movements. The two-day meet is expected to finalize long-awaited rate rationalization, with reports suggesting new slabs could be rolled out ahead of the festive season by September 22. Analysts estimate that a 7–10% GST cut could translate into meaningful price reductions for two-wheelers, small cars, tractors, and select consumer goods.

Individual Stock Movements

• Manganese ore producer MOIL jumped 6.4% after reporting a 17% year-on-year growth in production in August, with sales increasing by about 26%.
• Construction company PNC Infratech gained 3% after securing a contract worth 2.97 billion rupees (approximately $34 million) from the Airports Authority of India for the extension of the runway at Varanasi airport.
• Indus Towers lost about 5% following the announcement of its plans to expand into international markets. Analysts have expressed concerns about this move and the associated capital allocation.

Nifty and Sensex Predictions

Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that the intraday market will remain volatile and non-directional. He suggests that level-based trading would be the ideal strategy for day traders. According to Rupak De, Senior Technical Analyst at LKP Securities, the trend is likely to remain weak for Nifty in the short term, with support at 24,500 and resistance at 24,700 and 24,850. Bajaj Broking Research noted that Bank Nifty has immediate support at 53,200-53,500 levels.