Markets Surge on Modi’s GST Bonanza
Indian equity markets witnessed a sharp rally on Monday as benchmark indices Sensex and Nifty opened higher, powered by Prime Minister Narendra Modi’s announcement of sweeping GST reforms by Diwali. The BSE Sensex jumped over 1,000 points intraday, while the NSE Nifty 50 crossed the historic 25,000 mark for the first time, marking its biggest intraday gain in more than three months.
Investor sentiment was buoyed by a double boost — the proposed restructuring of the Goods and Services Tax (GST) regime and S&P Global Ratings’ decision to upgrade India’s sovereign credit rating. These developments encouraged investors to look past global trade uncertainties and refocus on India’s long-term growth potential.
Nifty 50 Breaches 25,000 Milestone
The NSE Nifty 50 surged as much as 1.6% to 25,022 in early trade, while the Sensex climbed 1,021.93 points to 81,619.59. The gains were broad-based, with auto, consumer discretionary, and consumer durables stocks driving the rally. Maruti Suzuki, Bajaj Finance, Mahindra & Mahindra, UltraTech Cement, and Bajaj Finserv were among the top gainers, while IT heavyweights Infosys and HCL Tech lagged.
“The Indian equity market is entering a phase of strong momentum,” said Devarsh Vakil, head of research at HDFC Securities. “With GST rationalisation on the cards and shorts by foreign investors still high, the possibility of a sharp rebound remains strong.”
Auto Sector Emerges as Biggest Beneficiary
The biggest boost came for automakers, with Maruti Suzuki India Ltd. and Hero MotoCorp Ltd. leading the rally. The Nifty Auto index jumped nearly 5% in early trade. Currently, automobiles fall under the highest GST slab of 28%, with additional cess levied depending on engine capacity and vehicle type.
The Centre’s proposal to restructure GST into two key slabs of 5% and 18%, along with a special 40% rate for a handful of items, is expected to significantly reduce automobile prices. Analysts believe that such a move will make vehicles more affordable, driving demand and boosting overall consumption.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “GST reforms are likely to be the most impactful for sectors like automobiles and cement. The rationalisation of tax rates will provide a big push to consumption and improve business confidence across industries.”
Consumer Durables, Cement, and AC Makers Rally
Shares of India’s top air-conditioner makers, Voltas Ltd. and Blue Star Ltd., rose nearly 6% after the GST rationalisation announcement. The consumer durables and cement sectors, both currently under the higher GST slab, are expected to see significant cost benefits.
Analysts suggest that this overhaul will reduce disputes arising from complicated classifications under GST, offering greater clarity to businesses and consumers alike.
Rupee Gains Against US Dollar
Adding to the positive sentiment, the Indian rupee appreciated 20 paise to 87.39 against the US dollar in early trade, supported by strong equity inflows. Forex traders, however, noted that caution remains due to uncertainty over the US–India tariff negotiations.
The forex and equity markets were shut on Friday due to the Independence Day holiday, amplifying Monday’s strong opening momentum.
CleanMax Files ₹5,200 Crore IPO
In another development, Clean Max Enviro Energy Solutions filed for a ₹5,200 crore IPO. The offering will include a fresh issue worth ₹1,500 crore and an offer for sale of ₹3,700 crore by promoters and a major shareholder.
Proceeds from the fresh issue will primarily be used to repay ₹1,125 crore in debt, while the remainder will go towards general corporate purposes. The company also hinted at a possible pre-IPO placement of up to ₹300 crore.
JSW Steel and POSCO Announce Partnership
Meanwhile, the steel sector witnessed positive news with JSW Steel Ltd. announcing a strategic partnership with South Korea’s POSCO Group. The companies will jointly explore the establishment of a 6 MTPA steel plant in India. Odisha is being considered as a likely location due to its rich resource base and logistical advantages.
A detailed feasibility study will be carried out to determine investment terms and resource allocation. Analysts believe this partnership will strengthen India’s position in the global steel supply chain.
Outlook: Markets Set for Positive Momentum
With GST reforms on the horizon, an upgraded credit rating, and foreign investor shorts ripe for unwinding, analysts say Indian markets have strong upward potential. “These are strong tailwinds that can take the market to new highs in the coming months,” said Vijayakumar of Geojit Investments.
For now, all eyes are on the government’s detailed GST plan expected to be rolled out before Diwali. If implemented as proposed, it could significantly reshape India’s consumption story and provide the next big leg of growth for the economy.
