Benchmark indices Sensex and Nifty kicked off the week with a bang, fueled by optimism around upcoming GST reforms and a credit rating upgrade by S&P. The excitement was palpable in early trading as both indices posted significant gains.
The 30-share BSE Sensex jumped a whopping 1,021.93 points to touch 81,619.59, while the Nifty surged 322.2 points to reach 24,953.50. Auto, consumer discretionary, and consumer durables stocks led the charge, with Maruti, Bajaj Finance, and Mahindra & Mahindra among the top performers.
Not all stocks joined the party, though. Larsen & Toubro, ITC, HCL Technologies, and Infosys lagged behind, reminding investors that selective momentum was at play.
The driving force behind this rally? Prime Minister Narendra Modi’s announcement of major GST reforms. In his Independence Day speech, Modi hinted at transformative changes to the GST regime, and on Sunday, he revealed that draft proposals had been shared with states for feedback. The goal? Implementation before Diwali.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, called this a strong tailwind for the market. “Declarations by the prime minister on the next major reforms in GST by Diwali are a big positive,” he said. “S&P upgrading India’s sovereign credit rating is another major boost.”
Expectations are high that the revised GST structure will simplify tax slabs, with most goods and services falling under the 5% and 18% categories. Stocks in the auto and cement sectors, currently taxed at 28%, stand to gain significantly. Companies like TVS Motors, Hero, Eicher, M&M, and Maruti are poised to benefit. The insurance sector could also see positive movement.
While domestic factors dominated the rally, global markets offered a mixed picture. Japan’s Nikkei 225, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng traded positively, but South Korea’s Kospi dipped. The US markets had ended mostly lower on Friday, making India’s surge even more noteworthy.
Oil prices remained stable, with Brent crude inching down just 0.05% to $65.82 a barrel. Meanwhile, foreign institutional investors had offloaded equities worth Rs 1,926.76 crore on Thursday, a move that now seems offset by renewed optimism.
With markets closed on Friday for Independence Day, Monday’s rally felt even more pronounced. The previous session had seen modest gains, with the Sensex rising 57.75 points and the Nifty edging up 11.95 points. Today’s leap, however, signaled a fresh wave of confidence.
The focus now shifts to how quickly GST reforms materialize and whether the market momentum can hold. For now, traders and investors are enjoying the ride.