Benchmark stock market indices rallied at opening on Monday, buoyed by potential reforms in GST just before the festive season begins. Auto sector shares rallied, sending the indices soaring.
The S&P BSE Sensex was up 956.81 points to 81,554.47, while the NSE Nifty50 jumped 307.10 points to 24,938.40 as of 9:24 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “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% and 18% tax slabs.”
Sectors like autos and cement which are presently in the 28% tax slabs are expected to benifit. TVS Motors, Hero, Eicher, M&M and Maruti are likely to respond positively to the news. Insurance companies are also expected to benefit from the GST revision. S&P 500 upgrading India’s sovereign credit rating is another major positive. But the market ignored this announcement since the negative news flows are also strong. India-US trade talks are unlikely to happen before August 27th deadline. The ‘ Trump Sword’ of 50% tariff dangling on India will restrain the market enthusiasm which can be triggered by the positive news mentioned earlier. The outcome of today’s meeting at the White House for finding a solution to the Russia-Ukraine conflict will be keenly watched by the market.
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