On Monday's trading session, a benchmark stock market indices saw a notable surge, propelled by hope for possible changes to the Goods and Services Tax (GST) framework. Market sentiment was significantly raised by the possibility that these adjustments would be made right before the important holiday season.
The rally was particularly pronounced in the auto sector, whose shares soared and contributed substantially to the overall increase in the indices. At 9:24 am, the S&P BSE Sensex had surged by 956.81 points, reaching 81,554.47. Similarly, the NSE Nifty50 recorded a substantial gain of 307.10 points, climbing to 24,938.40.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided insights into the factors fueling this market upswing. He stated, “There are strong tailwinds for the market with potential to take it higher. 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 pc and 18 pc tax slabs.”
This anticipated GST revision is expected to particularly benefit sectors like automobiles and cement, which are currently subject to a higher 28 pc tax slab. Dr Vijayakumar noted that companies such as TVS Motors, Hero, Eicher, M&M, and Maruti are likely to respond positively to this news. He also highlighted that insurance companies are expected to gain from the proposed GST changes.
Also Read: New GST reforms will likely drive up stock markets this week
In addition to the GST reforms, another major positive for the market was the S&P 500 upgrading India’s sovereign credit rating. However, Dr Vijayakumar claims that because this announcement was overshadowed by some very negative news flows, the market did not fully profit from it.
The current state of the India-US trade negotiations, which are not anticipated to be completed by the deadline of August 27, is a major source of concern. The "Trump Sword," referring to a potential 50 pc tariff on Indian goods, is a significant factor that could restrain market enthusiasm, despite the positive domestic developments.
Furthermore, investors are closely monitoring the outcome of a meeting at the White House scheduled for today, which aims to find a resolution to the Russia-Ukraine conflict, as this could have a significant impact on global market stability.
Also Read: PM Modi promises GST overhaul before Diwali, calls review crucial
Follow us
