Sensex Soars Over 1,000 Points, Nifty Tops 24,950 as PM Modi’s GST Overhaul Promise Ignites Market Rally
The Indian stock markets opened with a powerful rally on Monday, as benchmark indices surged on the back of firm domestic cues and stable global trends. The BSE Sensex skyrocketed by 1,022 points to open at 81,619.59, while the NSE Nifty jumped 319 points to trade comfortably above the 24,950 mark in early deals.
The buoyant market sentiment was primarily fueled by Prime Minister Narendra Modi’s Independence Day announcement signaling a major overhaul of the Goods and Services Tax (GST) structure, which is expected to provide a significant boost to consumption.
The rally was led by automobile and consumer durable stocks, which are poised to be the biggest beneficiaries of the proposed tax changes. Reports suggest the Centre is considering scrapping the current 12% and 28% GST slabs and realigning most items into the more streamlined 5% and 18% categories.
Reflecting this optimism, 25 of the 30 Sensex stocks were trading in the green, with Maruti Suzuki leading the charge with a massive 6.6% gain. Other top performers included Bajaj Finance, which rose 4.5%, Mahindra & Mahindra (3.7%), UltraTech Cement (3.6%), and Trent (3.28%). A few blue-chips, however, bucked the trend, with Larsen & Toubro, ITC, and HCL Tech trading with minor losses.
Market experts believe the GST announcement has provided strong tailwinds for the market. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, “Declarations by the prime minister on the next major reforms in GST by Diwali, is a big positive.
The expectation is that most of the goods and services will be in the 5% and 18% tax slabs. Sectors like autos and cement which are presently in the 28% tax slabs are expected to benefit.” He added that insurance companies are also likely to gain from the GST revision.
However, Vijayakumar also pointed to potential headwinds that could temper the market’s enthusiasm. He noted that while S&P 500’s recent upgrade of India’s sovereign credit rating is a major positive, the market has largely ignored it due to strong negative news flows.
The looming uncertainty over India-US trade talks, with an August 27 deadline approaching, and the “Trump Sword” of potential 50% tariffs continue to be a concern. Furthermore, investors will be keenly watching the outcome of Monday’s meeting at the White House aimed at finding a solution to the Russia-Ukraine conflict.
