Markets Surge As GST Rate Cuts Spark Investor Optimism; Sensex Jumps Over 550 Points

Indian equity benchmarks opened sharply higher on Thursday, fuelled by investor optimism over sweeping GST rate reductions across key sectors.

By 9.25 AM, the Sensex had climbed 554 points or 0.69 per cent to 81,122, while the Nifty advanced 159 points or 0.64 per cent to 24,874.

Broader indices also edged higher, with the Nifty Midcap 100 rising 0.21 per cent and the Nifty Smallcap 100 inching up 0.05 per cent.

Analysts attributed the positive start to the government’s decision to lower GST rates on insurance, medicines and daily essentials, providing relief to households, farmers and industries.

Among sectoral indices, Nifty Auto emerged as the top performer, soaring 2.51 per cent, followed by Nifty FMCG, which gained 1.73 per cent.

However, Nifty IT, Nifty Metal and Nifty Pharma traded in negative territory, reflecting selective buying by investors.

Heavyweights such as Hindustan Unilever, Grasim Industries, Bajaj Finserv and Trent led the gainers within the Nifty pack, while NTPC, Reliance Industries, Hindalco Industries and HCL Technologies were among the notable laggards.

Market observers highlighted that around 90 per cent of goods earlier taxed at 28 per cent GST have now shifted to the 18 per cent slab, and nearly 99 per cent of items from the 12 per cent category have moved to the 5 per cent bracket, a development expected to lift consumption and corporate earnings.

Analysts Predict Growth Momentum

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, described the GST cuts as ‘better than expected’ and said they could trigger a virtuous cycle for India’s economy.

He projected that growth could reach 6.5 per cent in FY26 and perhaps 7 per cent in FY27, with automobiles, FMCG, white goods, cement and insurance likely to attract strong buying interest.

He also cautioned that, despite the initial enthusiasm, tariff-related issues might weigh on markets in the longer term.

Asian markets offered mixed signals on Thursday. Japan’s Nikkei was up 1.23 per cent and South Korea’s Kospi gained 0.38 per cent, while Hong Kong’s Hang Seng Index dipped 1.06 per cent and China’s Shanghai and Shenzhen indices fell 1.71 per cent and 2.19 per cent respectively.

Overnight, the Nasdaq surged 1.03 per cent and the S&P 500 gained 0.51 per cent, but the Dow Jones slipped 0.05 per cent.

Meanwhile, foreign portfolio investors turned net sellers on Wednesday, offloading ₹1,666 crore of Indian equities, while domestic institutional investors bought shares worth ₹2,495 crore, a sign of continued domestic support even amid global uncertainty.

With GST reforms promising to stimulate demand, analysts expect market momentum to remain strong in the near term, led by consumption-oriented and auto-related stocks.

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