GST Reforms Ignite Market Surge, Sensex Soars 1,168 Points
Nifty reclaims 25,000 as auto stocks lead rally.
Indian stock markets surged on Monday, driven by robust buying in auto and consumer durables stocks, fueled by optimism over proposed GST reforms and S&P’s upgrade of India’s sovereign credit rating. The BSE Sensex skyrocketed 1,168.11 points, or 1.44%, to close at 81,765.77, while the NSE Nifty soared 390.7 points, or 1.58%, to reclaim the 25,022 level, extending gains from the morning session.
The rally was propelled by strong performances from auto sector giants, with Hero MotoCorp leaping nearly 9% and Maruti Suzuki zooming over 8%. Other Sensex gainers included Bajaj Finance, UltraTech Cement, Mahindra & Mahindra, Trent, and Bajaj Finserv, reflecting broad-based market enthusiasm. However, Larsen & Toubro, Sun Pharma, HCL Technologies, and Infosys lagged behind. The BSE auto index was a standout, surging 4.57% to 56,404.06, as investors anticipated tax relief for the sector.
Prime Minister Narendra Modi’s announcement on Sunday, detailing plans for sweeping GST reforms by Diwali, significantly boosted market sentiment. Speaking after his Independence Day address on August 15, Modi revealed that the draft for next-generation GST reforms had been shared with states, urging their cooperation for swift implementation. Analysts expect the reforms to streamline tax slabs, with most goods and services likely falling under 5% and 18% brackets, down from the current 28% for sectors like auto and cement.
Also Read: Sebi to Overhaul Margin Trading Rules
“The GST reform announcement is a game-changer for markets,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. “Sectors like autos and cement, currently taxed at 28%, stand to gain significantly. Companies like TVS Motors, Hero MotoCorp, Eicher, Mahindra & Mahindra, and Maruti are poised for growth, alongside insurance firms.” S&P’s upgrade of India’s sovereign credit rating further bolstered investor confidence, signaling economic stability.
Globally, Asian markets showed mixed trends, with Japan’s Nikkei 225, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng trading higher, while South Korea’s Kospi dipped. US markets closed mostly lower on Friday. Brent crude edged up 0.06% to $65.89 per barrel. Foreign Institutional Investors (FIIs) sold equities worth ₹1,926.76 crore on Thursday, per exchange data, though domestic optimism overshadowed this outflow.
The markets, closed on Friday for Independence Day, had seen modest gains on Thursday, with the Sensex up 57.75 points to 80,597.66 and Nifty up 11.95 points to 24,631.30. Monday’s rally underscores strong market confidence in India’s economic reforms and growth prospects.
Also Read: Jawa, Yezdi, and BSA Set to Roar Globally as Classic Legends Plans IPO Within 18 Months!
