Nifty, Sensex Likely to Open Higher on GST Reform Hopes

Pre-Market Update at 7:30 AM: On Monday, August 18, benchmark indices Sensex and Nifty 50 are expected to open on a positive note, supported by favourable domestic and global cues. As of 7:15 AM, the GIFT Nifty was trading at 24,901, up 246 points from its previous close, indicating a firm start for the market.

During the Independence Day address, Prime Minister Narendra Modi outlined structural reforms in the Goods and Services Tax (GST). The proposal includes removing the 12 per cent and 28 per cent tax slabs, with most goods and services likely to shift into the 5 per cent and 18 per cent categories. Such GST changes could impact Large-Cap as well as Mid-Cap companies across sectors.

Adding to positive sentiment, S&P Global upgraded India’s sovereign credit rating from BBB- to BBB with a “stable” outlook. The short-term rating was raised from A-3 to A-2, while the transfer and convertibility assessment improved to A- from BBB+. This marks an important step in India’s credit profile and could influence foreign institutional flows.

Institutional activity remained mixed last week. On Thursday, August 14, Foreign Institutional Investors (FIIs) sold equities worth Rs 1,926.76 crore, extending their selling streak to four sessions. On the other hand, Domestic Institutional Investors (DIIs) continued their buying momentum, purchasing shares worth Rs 3,895.68 crore and maintaining a streak of 29 consecutive trading sessions.

On the same day, benchmark indices ended marginally higher. The Sensex closed at 80,597.66, up 57.75 points or 0.07 per cent, while the Nifty 50 finished at 24,631.30, higher by 11.95 points or 0.05 per cent, holding above the 24,600 mark. Market participants stayed cautious ahead of global developments, including the US-Russia discussions on Ukraine.

Globally, Wall Street closed the week mixed. The Dow Jones Industrial Average gained 0.08 per cent to 44,946.12, while the S&P 500 slipped 0.29 per cent to 6,449.80, and the Nasdaq Composite dropped 0.40 per cent to 21,622.98. Investors are watching closely for the Federal Reserve’s policy signals, with growing expectations of a rate cut amid slowing labour market conditions.

Meanwhile, US President Donald Trump met Russian President Vladimir Putin in Alaska on August 15, followed by discussions with Ukrainian President Volodymyr Zelensky and European leaders on August 17. Trump’s comments of “big progress” raised optimism about easing geopolitical tensions.

In commodities, the dollar index edged higher to 97.85, while gold prices rose to USD 3,345 per ounce, though still near a two-week low. Oil prices struggled as Trump stepped back from further restrictions on Russian crude exports. Brent fell 0.4 per cent to USD 65.61 per barrel, and US crude eased 0.2 per cent to USD 62.67 per barrel.

Market participants this week will track GST reform updates, US-Russia peace talks, US Federal Reserve meeting minutes, foreign fund flows, IPO activity, and other domestic and global cues. Developments on trade negotiations between India and the US will also remain important, as the planned visit by US trade negotiators to New Delhi was cancelled amid bilateral tensions.

For today, PNB Housing, PG Electroplast, Titagarh Rail System and RBL Bank remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.