The equity benchmark indices Sensex and Nifty rallied on Monday, climbing nearly 1 percent on heavy buying in auto and consumer durables stocks, buoyed by plans for big bang reforms in the GST regime by Diwali.
Sensex jumped 676.09 points or 0.84 percent to settle at 81,273.75. During the day, it zoomed by 1,168.11 points or 1.44 percent to 81,765.77.
The Nifty climbed 245.65 points or 1 percent to end at 24,876.95. Intra-day, it surged 390.7 points or 1.58 percent to 25,022.
Maruti, Bajaj Finance, Mahindra & Mahindra, UltraTech Cement, Trent and Bajaj Finserv were among the major gainers.
15 of the 16 major sectors advanced, with autos and consumer stocks jumping 3.4 percent and 1.8 percent, respectively. The broader small-caps and mid-caps rose about 1 percent each.
Key factors driving the rally:
1) GST reform push: In his Independence Day address on August 15, Prime Minister Modi said the Centre has circulated a draft of proposed GST changes to states and sought their cooperation to implement them before Diwali. Market experts said the proposal could shift most goods and services into the 5 percent and 18 percent slabs, benefiting sectors like autos and cement, which currently face a 28 percent tax. "Insurance companies are also expected to benefit from the revision," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2) S&P upgrade: S&P Global Ratings upgraded India’s long-term sovereign credit rating on Thursday to ‘BBB’ from ‘BBB-’, the first upgrade since 2007, citing strong economic growth, improved policy credibility and fiscal consolidation. "Declarations by the prime minister on GST reforms and the S&P upgrade are strong positives for the market," Vijayakumar added. The equity markets were closed on Friday for Independence Day.
3) Global cues: Asian markets traded higher with Japan’s Nikkei, Shanghai Composite and Hong Kong’s Hang Seng in positive territory. Wall Street futures also pointed to a firm opening.
4) Crude prices: Brent crude slipped 0.05 percent to USD 65.82 per barrel. Softer crude prices ease concerns on India’s import bill and inflation, supporting sentiment.
5) Rupee gains: The rupee strengthened 20 paise to 87.39 against the US dollar in early trade, tracking firm domestic equities. It had settled at 87.59 in the previous session.
6) US softens tariff stance: Market mood also improved after US President Donald Trump signalled that Washington may not impose secondary tariffs on countries continuing to buy Russian crude, easing concerns of a potential hit to India.
Technical view
Anand James, Chief Market Strategist at Geojit Financial Services, said Nifty’s reversal attempts last week stalled near 24,670-24,720, but the upmove in mid and smallcaps shows a broad recovery. “We continue to look at 24,850-25,000-25,200 as objectives. While 24,850 may offer resistance, the upside remains intact as long as volatility holds above 24,650,” he said.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
