Sensex, Nifty 50 reverse gains to end lower. Why was stock market down today?

The slide stems from expiry-driven unwinding in financial stocks, which dominate the Nifty 50, even as investors awaited GST reforms.

India's stock market reversed early gains to end lower today, as heavy selling in financial stocks pulled down a broad-based rally, while investors awaited clarity on upcoming GST reforms.

The NSE Nifty 50 fell 0.18% to 24,579.60 points and the BSE Sensex slipped 0.26% to 80,157.88. The indexes rose as much as 0.5% earlier in the session.

Why is market down today?

The slide stems from expiry-driven unwinding in financials, which dominate the Nifty 50, Reuters reported on Tuesday, citing two advisors.

The NSE's weekly derivatives expiries shifted to Tuesday from Thursday on 2 September, adding extra pressure and volatility. A guage of financial stocks ended 0.7% lower after rising 0.35% earlier in the session.

In contrast, expectations of GST rate cuts buoyed consumer stocks, which advanced 1.1%. Nestle India Ltd., Hindustan Unilever Ltd., Dabur India Ltd. and Emami Ltd. gained between 1% and 4% each. The GST Council, set to meet on 3-4 September, is considering lowering GST by at least 10 percentage points on about 175 products, including shampoos, hybrid cars, and consumer electronics.

“Investor sentiment is torn between 50% US tariff and optimism over GST reforms,” Prashant Tapse, senior vice president (research) at Mehta Equities, told Reuters.

Stocks in Focus

Nine of the 16 major sectors ended higher. Broader markets outperformed, with small-caps and mid-caps advancing 0.5% and 0.3%, respectively.

Reliance Industries Ltd. rose about 1%, lifting the energy sub-index by 1%, after Morgan Stanley raised its target price on the stock, citing benefits from China's push to reduce excess capacity in energy and solar supply chains.

Among individual stocks, sugar stocks gained after the government allowed unrestricted ethanol production from sugarcane by-products.

Mahindra & Mahindra Ltd., which is betting on higher-priced electric cars, fell 2.4% after Reuters reported that a GST panel has recommended raising the GST on luxury electric cars to 18% from 5%.

With inputs from Reuters.