Stock market, GST reforms: Indian investors increased their wealth by more than 6.36,184.36 crore in the first 30 minutes of trading on Dalal Street on Monday. The market capitalization of all BSE-listed companies increased to Rs 4,52,13,816.70 crore on Monday, from Rs 4,45,77,632.34 crore on Thursday, owing to a slew of positive domestic and global cues.
GST reforms announced by Prime Minister Narendra Modi on Friday, August 15 as a mega 'Diwali Gift' boosted consumption-led counters. In addition, S&P Global upgraded India's rating after 18 years, fueling optimism. Aside from that, US President Donald Trump's benign tone boosted local equities.
Key Highlights
- Sensex jumps 1,150 points in 30 minutes as ₹6.36 lakh crore added to investor wealth.
- Stock market surge driven by optimism around GST reforms and improved investor sentiment.
Optimism is driven by expectations of GST rationalization into two slabs at the upcoming council meeting, as well as global cues from the Trump-Putin dialogue and upcoming FOMC minutes on August 20 and Jerome Powell's Jackson Hole speech on August 22, according to Prashanth Tapse, Senior VP (Research), Mehta Equities.
The positive news flow pushed the benchmark indices higher, with the BSE Sensex up more than 1,168 points, or 1.45%, to 81,765.77 on Monday. Similarly, the Nifty50 index reclaimed the 25,000 market. The NSE's barometer soared 390.70 points, or 1.58%, to 25,022 in early trade.
Broader markets rose in tandem. The BSE midcap index increased by more than 1.5 percent, while the BSE Smallcap index increased by more than 1.33 percent in the early trading session. However, the fear gauge India VIX spiked nearly 9% to 13.47, only to fall back slightly. During the early trading session, all sectors rose.
There are strong tailwinds for the market, such as GST rationalization, which have the potential to drive it higher. The S&P 500's upgrade of India's sovereign credit rating is another significant positive development. However, the market ignored this announcement because the negative news flow was also strong, according to VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
"India-US trade talks are unlikely to occur before the August 27 deadline. The 'Trump Sword' of a 50% tariff imposed on India will dampen market enthusiasm, which could be triggered by the previously mentioned positive news. The outcome of today's meeting at the White House to resolve the Russia-Ukraine conflict will be closely watched by the market," he added.
On a sectoral basis, the Nifty Auto index rose more than 4.5 percent, while the Nifty Consumer Durables and Nifty Financial Services indexes rose more than 3% each. The Nifty Realty index also rose nearly 3%. Other notable gainers included the Nifty Bank (both private and public sector) and metal indices.
Hero MotoCorp led the gainers in the Nifty50 pack, up 8%. Bajaj Finance gained more than 6%. Mahindra & Mahindra, Bajaj Finserv, Maruti Suzuki, Trent, Bajaj Auto, and UltraTech Cement were also significant gainers, rising 4-5 percent each. L&T and Sun Pharma were among the laggards, each accounting for half to one percent.
Also Read: PM Modi's Tax Reforms to Strain Finances but Lift Image Amid US Trade Row
In the broader market, Fusion Finance increased by 12 percent, while Zaggle Prepaid Ocean Services increased by more than 10%. Ashok Leyland, Aditya Vision, Vodafone Idea, Hyundai Motor India, Amber Enterprises, Gabriel India, and PG Electroplast all saw gains of 8-10 percent. On the contrary, Ethos fell 8% and Godfrey Phillips fell 5% at the open.
The advance-decline ratio was heavily skewed in favor of bulls, with 2,564 stocks rising on the BSE and 1013 falling. 177 stocks remained unchanged in early trading. In the early trade, 377 stocks hit the circuit, with 206 locked in the upper circuit and 171 trading at the lower circuit limit.
