Sensex Jumps 600 Points, Nifty Nears 25,000 As Investors Cheered The Sweeping GST Overhaul

Indian equities opened sharply higher on Thursday as investors cheered the sweeping GST overhaul slated to take effect from September 22, with a broad-based rally across consumption, autos and select financials. The Sensex rose nearly 1% at the open to around 81,456, while the Nifty climbed above 24,900, tracking optimism that lower indirect taxes on mass-consumption goods and electronics could spur demand. Early trade action was brisk in auto and FMCG counters, with Mahindra & Mahindra jumping about 6% on hopes of sustained rural recovery and price-sensitive tailwinds from tax rationalisation.

Sentiment was bolstered by the GST Council’s move to compress slabs to 5% and 18% while introducing a 40% levy for sin and super-luxury goods, a rejig seen as both consumption-friendly and fiscally pragmatic. Street participants said the cut in rates on daily-use items like hair oil, shampoos, soaps, toothpaste and toothbrushes to 5%, and reductions on packaged foods and household products, could translate into near-term margin relief for companies and price benefits for consumers, potentially feeding into higher volumes ahead of the festive season. With all television categories shifting to 18% and several appliances stepping down from the erstwhile 28% band, discretionary demand pockets also looked better positioned.

Autos and durables rallied on expectations that lower effective taxes and improved affordability would aid replacement cycles and entry segments. Analysts flagged ancillary beneficiaries in building materials and white goods where products moving into the 18% slab may unlock deferred purchases.

Rate-sensitive financials traded mixed, but consumption lenders and select NBFCs saw support on hopes of better retail throughput if price cuts sustain at retail shelves. Broader market breadth was positive, with advances comfortably outpacing declines in early deals as traders positioned for a short-term momentum carry into the weekend.

Dealers cautioned that near-term profit-taking is possible after the gap-up open, with global cues and crude price trends still in focus. However, they noted that clearer visibility on GST implementation timelines and company-level pass-through strategies could keep domestic flows constructive. With the reforms pitched as simplifying compliance and addressing inverted duty structures in textiles and synthetics, some supply-chain efficiencies may emerge over the coming quarters, potentially aiding margins beyond the immediate consumption impulse.

For investors, the early-morning leadership in autos, staples, consumer discretionary and select capital goods reflected a pragmatic read of policy: lower prices underpin demand, while a higher 40% slab ring-fences revenue from luxury and sin categories.

Traders watched 24,900–25,000 on Nifty as an immediate resistance band and flagged 24,700–24,750 as the first area of intraday support. If follow-through buying extends beyond the opening spurt, desks said, heavyweight participation in banks and Reliance-class names would be key to sustaining an assault on fresh highs later in the month.

Meta description: Sensex jumps ~600 pts, Nifty nears 25,000 as GST cuts fire up consumption hopes; autos, FMCG lead early rally with M&M up 6%.