Sensex up 350 pts, Nifty near 24,750: Optimism ahead of GST Council meet among key factors behind market rise

Investors are optimistic about various reforms likely to be announced at Goods and Services Tax (GST) council meeting later this week.

The GST council, scheduled to meet on September 3-4, is planning to cut consumption tax by at least 10 percentage points on nearly 175 products ranging from shampoos and hybrid cars to consumer electronics.

FMCG index was trading over 1% higher as most consumer goods are expected to placed in the lower tax slab. On September 2, Dabur and Emami led the gains on the index by rising 3% and 1.85%, respectively.

RIL gets brokerage boost:

Reliance Industries Ltd stock was the top gainer on Nifty by rising over 2% on a positive note by Morgan Stanley.

Morgan Stanley said the company stands to benefit most from China's drive to curb excess capacity and price wars in energy and solar supply chains.

Reliance led both the energy and oil and gas indexes about 1.3% higher.

Reliance Industries stands to benefit the most from China’s push to curb overcapacity from a gamut of industries, and the conglomerate’s own efforts to streamline its businesses, according to Morgan Stanley.

Billionaire Mukesh Ambani’s company “is the largest beneficiary of China’s anti-involution focus across energy and solar supply chains,” analysts including Mayank Maheshwari wrote in a note dated September 1. “Reliance is going through self-anti-involution in consumer businesses and benefiting from China’s anti-involution drive in multiple ways – both of which are not priced in.”

The term ‘involution’ in China refers to cutthroat competition with little payoff. ‘Anti-involution’ describes moves by companies and policymakers to counter that trend, a shift that has supported equities as Beijing battles deflation.

Morgan Stanley maintained an overweight rating on the stock and raised its 12-month price target to Rs 1,701 from Rs 1,602, implying a 26% gain from Monday’s close. The stock’s current “valuations imply near zero value to new energy and AI investments with limited upside on FMCG growth,” the analysts said.

Meanwhile, Motilal Oswal said RIL's 48th AGM has set "the stage for multi-decadal value creation" and reiterated its 'buy' call with a target price of Rs 1,700.

GDP boost continues:

Amid strained India-US trade ties, the better-than-expected Q1 GDP growth has boosted investor sentiment for the second consecutive day.

"Global geopolitics and power equations are changing at a fast and furious pace. India-US relations have deteriorated and normalcy appears difficult in the near future. More actions from the unpredictable US administration are likely. The consequences on the Indian economy and markets cannot be ascertained now. Investors should wait and watch for developments to unfold. Meanwhile, investments can be focused on domestic consumption plays which are on sound footing. There are clear signs of the Indian economy bouncing back as reflected in the Q1 GDP numbers," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Technical View

"On the daily chart, Nifty formed a Morning Star candlestick pattern, signaling a potential reversal and renewed strength. The index is currently trading above its long-term EMA while approaching its short-term and medium-term EMAs, reflecting improving trend alignment. On the downside, immediate support is placed at 24,400, followed by 24,000. A break below these levels could trigger extended selling pressure. On the upside, resistance is seen at 24,700, followed by the 24,800–25,000 zone. A decisive move above this zone may open up fresh buying opportunities.

"Overall, the market is showing signs of a bullish reversal, but confirmation is still awaited. Until then, traders are advised to adopt a buy-on-dips strategy in quality names and focus on stock-specific opportunities for better risk-adjusted returns," said Mandar Bhojane, Sr Technical & Derivative Analyst, Choice Broking.

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