Indian stock markets ended the week on a positive note, with benchmark indices Nifty and Sensex posting modest gains of around 0.85 per cent.
Investor focus shifted towards mid- and small-cap stocks as optimism around GST rationalisation persisted, even as global trade tensions resurfaced.
While the Nifty IT index fell over 2.5 per cent amid concerns over reduced discretionary spending, consumer-driven sectors such as auto and metals saw notable gains.
Nifty Metal and Auto indices rose around 1 per cent each, supported by expectations that GST cuts would stimulate domestic consumption and aid demand recovery.
In contrast, the Realty and FMCG indices slipped up to 1.5 per cent due to profit booking.
Auto majors, including Eicher Motors and M&M, rallied 2 per cent to record highs following a reduction in GST on vehicles from 28 per cent to 18 per cent.
Metal sector stocks also performed strongly, with GMDC surging 11 per cent to Rs 509, and National Aluminium and NMDC gaining up to 2 per cent.
Macroeconomic Factors & Global Cues
Positive macroeconomic data, hopes of a US Federal Reserve rate cut, and other favourable global cues lent support to domestic equities.
However, rising yields in German and French 30-year bonds, hitting decade highs, kept investor caution alive due to Eurozone fiscal imbalances.
Vinod Nair, Head of Research at Geojit Investments, said, “A multi-asset investment strategy is expected to gain traction. Traders are watching US jobs data, nonfarm payrolls, unemployment, and inflation, alongside ECB rate decisions, to gauge market direction.”
On the technical front, Motilal Oswal analysts noted that the Nifty has consolidated within a wider range, forming an inside bar pattern.
Analysts identify support levels at 24,650 and 24,500, noting that Nifty must hold above 24,700 to move upward towards 24,850 and 25,000.
Persistent foreign outflows weighed on the rupee, which slipped to a record low against the US dollar, while safe-haven demand pushed gold prices to all-time highs.
Analysts expect GST rationalisation to further boost consumption, simplify taxation, reduce compliance burdens, and enhance voluntary compliance, widening the country’s tax base.
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