Sensex, Nifty may hit fresh lifetime highs if GST Bill gets through Parliament

The Goods and Services Tax (GST) Bill has finally entered the last mile with it slated to be taken up in Parliament on Wednesday. Many on the Dalal Street believe the headline indices Sensex and Nifty will hit fresh highs if the GST Bill sees the light of the day, the likelihood of which has strengthened with government including the demands of the states and opposition parties in the fresh Bill.

The market has been on a wobbly road, largely upward, as it awaited the GST since the beginning of the monsoon session. Experts believe the positive sentiment in the market has mostly been built on the hopes that GST will get a green signal.

"If GST becomes the reality, we see Nifty to extend its move and cross the next hurdle at 8,800, and if it manages to cross the same, the possibility of the index going beyond the 9,200 cannot be written off," said Rohit Gadia, Founder & CEO, CapitalVia Global Research.

"Currently market is factoring a lot on GST bill passage in Rajya Sabha, the possibility of which has increased with regional parties coming on board. Any disappointment on this front may lead to nearly 5 per cent correction on the Nifty from current levels," said Piyush Garg of ICICI Securities.   

What if GST doesn't get through Parliament

While the odds are in favour of GST becoming the law, one cannot rule out the opposite eventuality. Gadia of CapitalVia expects Nifty to correct to 8400-8350 level if government fails to pass the GST.

"If GST fails to become the law, the market will start looking at the domestic factor and will not move lower significantly. The effect of salary hike of central government employees thanks to seventh pay commission is going to be a major boost for our economy, and market will keep a watch on the same," said Gadia.
     
Sudhanshu of Amrapali Aadya said if GST doesn't become the reality, then the stocks which have already run-up on the hope of passage of GST, can witness significant correction, so do benchmark indices.