Nifty Posts Weekly Gain Of 1.32% As GST Reforms & H2 Earnings Boost Mood

Indian equity markets ended the week on a positive note, with benchmark indices registering solid gains, propelled by expectations of improved earnings in the second half of FY26 and tax reform measures.

The Nifty rose by about 1.32 per cent while the Sensex followed with a 1.21 per cent fortnightly gain, largely driven by momentum in auto and technology stocks.

Auto and FMCG shares emerged as big winners, backed by hopes that the forthcoming GST rationalisation will spur domestic consumption.

Meanwhile, the IT index enjoyed renewed optimism thanks to gains from expectations around US Fed rate cuts, as well as a share buyback announcement by Infosys.

Mid-cap and small-cap stocks outperformed the broader indices, suggesting broad-based participation in the upswing.

Analysts noted that the Nifty has broken out of a symmetrical triangle pattern on its weekly chart, closing strongly above the 25,100 level. Traders identify immediate resistance around the 25,160, 25,250, and 25,500 zones, while they place support near 25,000 and then 24,900.

Macro Drivers: GST, Inflation, & Global Signals

Expectations of sweeping Goods and Services Tax (GST) reforms have hovered as a major catalyst.

The government plans to rationalise taxes and, alongside India’s mild inflation, expects this to drive consumption while exporters and domestic sectors closely monitor the impact.

Internationally, rising hopes of monetary easing in the US bolstered investor confidence.

This week, US retail inflation rose to 2.9% in August, its highest since January, though core inflation held at 3.1%. The yield on the 10‑year US Treasury note fell to around 4%, its lowest since April, fueling speculation of impending rate cuts.

Despite the gains, some caution remains. Analysts warn that valuations are stretched, and any significant earnings miss could unbalance expectations. Global policy uncertainties, as well as possible foreign outflows and volatility in inflation, remain risks.

Looking ahead, many expect momentum to rise in the second half of FY26, especially if both the GST reforms and global easing materialise. If executed well, these reforms could loosen the drag on consumption, supporting corporate profits and potentially lifting the market further.

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