Sensex Jumps 843 Points, Nifty Nears 24,950 on GST Reform Signal and Rating Upgrade

Market Update at 12:30 PM: Indian stock markets opened the week on a strong note, supported by two major developments. First, Prime Minister Narendra Modi announced that the government will introduce next-generation GST reforms to rationalise tax rates meaningfully by Diwali 2025. Second, S&P Global Ratings upgraded India’s sovereign credit rating from ‘BBB-’ to ‘BBB’ with a stable outlook, marking an important milestone for the economy.

At 12:00 PM, the BSE Sensex was trading at 81,440, higher by 843 points or 1.05 per cent, while the NSE Nifty50 gained 289.95 points or 1.18 per cent to trade at 24,921.25 levels.

Among Nifty constituents, Hero MotoCorp led the rally with gains of 8 per cent, followed by Maruti Suzuki, Bajaj Finance, Bajaj Auto, Ultratech Cement, M&M, Nestle India, HUL, Bajaj Finserv, SBI Life, HDFC Life, Trent, IndusInd Bank, and Tata Consumer Products. On the other hand, HCL Tech, ITC, L&T, Dr Reddy's Labs, Sun Pharma, Wipro, Infosys, and ONGC were the top laggards.

In the broader markets, both Nifty MidCap and Nifty SmallCap indices added 1 per cent each, reflecting positive momentum across Mid-Cap and Small-Cap stocks. The Nifty Bank and Nifty Financial Services indices gained 1.18 per cent and 1.67 per cent, respectively, after S&P Global upgraded the long-term issuer credit ratings of major lenders and NBFCs, including State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, Indian Bank, Bajaj Finance, Tata Capital, and L&T Finance.

Sectoral indices also showed strong traction. The Nifty Auto index surged over 4 per cent, driven by Hero MotoCorp’s 8 per cent rally, Maruti Suzuki’s 6 per cent rise, and TVS Motor’s 5 per cent gains. The Nifty Consumer Durables index advanced 3.3 per cent. 

Meanwhile, India VIX, the volatility index and fear gauge, climbed over 4 per cent, suggesting higher market volatility ahead.

Market Update at 10:30 AM: India’s equity benchmarks opened the week on a strong note, driven by gains in automakers, consumer firms, and financials after New Delhi proposed sweeping tax reforms on goods and services. An upgrade from S&P on key financial constituents also boosted market sentiment.

The Nifty 50 rose 1.25 per cent to 24,938.45 points, while the BSE Sensex gained 1.17 per cent to 81,541.2 as of 9:24 a.m. IST. Among sectoral indices, 15 out of 16 advanced, with Auto rising 3.4 per cent and FMCG climbing 1.8 per cent. Broader markets also participated in the rally, as the Small-Cap and Mid-Cap indices gained about 1 per cent each.

Automakers led the surge, with Maruti Suzuki jumping 6.2 per cent and Hero MotoCorp surging 7.5 per cent after reports indicated that the government proposed lowering goods and services tax (GST) on small cars to 18 per cent from 28 per cent. Analysts believe the move could lift festive demand and support the earnings outlook for fiscal year 2027.

Heavyweight financial stocks also added strength, with the Finance index gaining 1.6 per cent. Shares of HDFC Bank and State Bank of India advanced following S&P’s ratings upgrade on several Large-Cap lenders.

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.