India’s equity markets saw notable shifts this week, shaped by regulatory actions, corporate announcements, and evolving macro cues. Below are the key highlights investors should track.

1. Infosys’ ₹18,000 Crore Buyback Underscores Confidence

Infosys announced its largest-ever buyback—₹18,000 crore (~US$2.04 billion) via a tender offer at ₹1,800 per share. This marks the company’s fifth such move, reflecting robust cash flows and management’s conviction that valuations remain attractive.

• IT Sector Impact: The move boosted sentiment across large-cap IT stocks, highlighting efficient capital allocation trends.

• Investor Takeaway: Well-timed buybacks support EPS growth and offer valuation floor for quality IT firms.

2. SEBI’s Crackdown on Speculative Options Activity

SEBI tightened rules around the high-risk “options lottery” trading culture, triggering sharp corrections in F&O-linked entities. Over ₹1.75 lakh crore in market cap was wiped out across brokerages and exchanges.

• Key Changes: Stricter margins, tighter position limits, and curbs on unhedged trades.

• Risks & Opportunities: While near-term volatility remains high, these measures could foster a healthier derivatives market longer term.

3. Defence Stocks in Focus: A Structural Play

Defence names like GRSE and Apollo Micro Systems rose up to 8%, as policy momentum reinforced India’s self-reliance drive in defence manufacturing.

• Growth Drivers: Increased government spending, Atmanirbhar Bharat push, and infrastructure modernisation.

• Outlook: Companies with strong order books and execution capabilities remain well positioned for multi-year growth.

4. GST Cuts on Tyres Spark Auto & Ancillary Optimism

Effective 22 September, GST on most tyres will be reduced from 28% to 18%, while tractor tyres will see a sharper cut from 18% to 5%.

• Beneficiaries: Auto-ancillary firms, agricultural equipment makers, and rural transport operators.

• Market Impact: Expected boost in volumes, margins, and competitiveness for tyre manufacturers.

5. Market Sentiment: Cautious but Constructive

Despite regulatory jitters, the market ended the week with modest gains. Drivers included:

• Growing optimism around potential U.S. rate cuts.

• Supportive domestic policy measures such as buybacks and tax reforms.

• Sectoral rotation—IT and defence led, while speculative trading segments faced pressure.

What to Watch Next

• Corporate Announcements: Will other large-cap IT firms follow Infosys in rewarding shareholders via buybacks?

• Regulatory Landscape: SEBI’s follow-up on F&O reforms and broker adjustments.

• Policy Developments: Possible GST tweaks in industrial or auto-linked sectors.

• Macro Cues: U.S. rate moves, inflation prints, and geopolitical risks.

At Luster Capital, we believe near-term volatility from policy and regulatory actions must be weighed against long-term structural drivers in sectors such as IT, defence, and autos. Our focus remains on identifying sustainable opportunities for steady growth.

🔔 Disclaimer: This content is for informational purposes only and should not be taken as investment advice. Stock market investments are subject to market risks. Please consult your financial advisor before investing.

✍️ Published by Luster Capital – your partner in stock market research, mutual fund distribution, and financial planning.

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