Market gives thumbs-up to GST reforms; Sensex surges 621 points, Nifty near 24,900; auto stocks lead
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Extending gains for the second straight session, Indian equities rallied on Thursday as investors welcomed the GST Council’s reform measures, with auto and FMCG stocks driving the gains. The benchmark indices, BSE Sensex and NSE Nifty, surged up to 0.7% in the first hours of trade so far.
The Sensex rallied by 621 points to 81,160, while Nifty rose by 0.70%, crossing the 24,800 mark, standing at 24,891.
In the BSE Sensex list, 22 companies advanced, while 8 declined. In the Nifty 50 list, 36 stocks advanced, and 14 declined.
Mahindra and Mahindra recorded the steepest rise, leading the index by 6.24%, trailed by Bajaj Finance, which rose by 4.67%, and Eicher Motors by 2.81%. Top laggards were Coal India (-0.97%), Eternal (-0.64%), and Wipro (-0.61%).
On the sectoral front, top performers included Nifty Auto, which gained 2.42%, and Nifty FMCG, which rose by 1.86%. In the FMCG list, Britannia led the charge, rising by 5.84%, followed by Colgate Palmolive, by 3.46%.
Broader markets continue to outperform the benchmark indices for another session, though the increase is marginal. Nifty Smallcap 50 gained only 0.07%, while Nifty Midcap 50 was up by 0.29%.
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Market expectations were not met by yesterday night’s GST rationalisation announcement, which resulted in a lukewarm reaction. The GST Council announced key reforms to promote domestic consumption, which simplified taxation into two slabs—5% and 18%, while adding a special 40% rate for luxury and sin goods.
In Wednesday’s session, markets closed higher after a volatile session, with the Sensex gaining 410 points to finish at 80,567.71, while the Nifty added 135 points to end at 24,715.05.
According to market experts, the reforms are welcomed, but they still maintain a cautious stance. "The ultimate beneficiary is the Indian consumer, who will benefit from lower prices. The potential big boost to consumption in an economy that is already in growth momentum will be big and may surprise on the upside. The market will start discounting this likely emerging scenario. There is a high probability of short covering today, pushing prices higher than expectations. However, after the initial enthusiasm, tariff issues will continue to haunt the market," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.