Sensex, Nifty: GST cuts bring early Diwali to NSE, BSE; stock market investor wealth up
The BSE Sensex opened at 81,456.67, up 888.96 points or 1.10 per cent. Nifty advanced 265.70 points or 1.08 per cent to 24,980.75.
- Sep 4, 2025,
- Updated Sep 4, 2025 9:25 AM IST
GST cuts announced late Wednesday brought early Diwali to stock exchanges NSE and BSE, as stock investor wealth, as suggested by market capitalisation of listed companies, swelled by Rs 3.5 lakh crore on Thursday, within minutes into the opening bell.
The BSE Sensex opened at 81,456.67, up 888.96 points or 1.10 per cent. Nifty advanced 265.70 points or 1.08 per cent to 24,980.75. Investor wealth, as suggested by the BSE market capitalisation, climbed Rs 3.46 lakh crore to Rs 4,56,74,927 crore.
In a landmark decision, the GST Council approved a sweeping rationalization of the GST regime, simplifying the existing four-slab structure into just two brackets: 5 per cent and 18 per cent. The Council though introduced a higher 40 per cent rate for select luxury and sin goods.
Trideep Bhattacharya, President and CIO- Equities Edelweiss MF said the GST 2.0 marks a defining reset for India’s consumption story. By rationalising slabs and lowering rates on mass categories while taxing sin goods higher, the Council has unlocked volume tailwinds for staples, durables and autos, reshaping equity market leadership in the coming years, he said.
Antique Stock Broking said the GST rationalization will help boost consumption, assuming tax multiplier of 1.5-2.3 times, during the upcoming festive period. This is on assumption that the GST benefit to be passed on to consumer. Multiple sectors are likely to benefit like auto, FMCG, insurance, cement, consumer durable, hotels, fashion retail and defence, the brokerage said.
Market veteran Nilesh Shah in an X post on Thursday called the GST slab consolidation and rate rationalisation as “ek teer kai nishaan”. Shah, who is Managing Director at Kotak Mahindra Asset Management Company said the GST reform would not only lower inflation but increase GDP growth and boost consumer sentiment, without disturbing the path of fiscal consolidation. He said the move would improve ease of doing business and partially offsets adverse effects of 'unfair' US tariffs.
Garima Kapoor, Economist and Executive Vice President at Elara Capital said the GST rate changes look favorable especially since there is across the board decline in daily use items including services like hotel rates below Rs 7,500.
"Moreover, very critical items like cement have seen a cut from 28 per cent to 18 per cent, which should be huge positive for the infra sector. The efforts to further ease the compliance burden on tax filers is positive and should aid ease of doing business. Today’s GST rate changes, along with RBI’s rate cuts, income tax rebates announced in FY26 budget and easing inflation are all levers for a consumption uptick in the economy," she said.
Auto makers are expected to gain immensely. The reforms include substantial tax reductions across auto segments while addressing industry worries around the inverted duty structure. Aall auto components now uniformly at 18 per cent against 18-28 per cent earlier). The taxation on EVs was maintained at 5 per cent.
Prashanth Tapse of Mehta Equities said stock market is likely to extend gains as positive global cues coupled with the GST rate rationalisation exercise by the government is expected to boost sentiment.
The GST move is expected to drive sales of several FMCG and white goods items during festive season, which could have a positive impact on the shares of listed companies going ahead, he said.
"However, FII selling spree in local markets and Trump's higher tariffs on India creating growth concerns will continue to weigh on the sentiment. Technically, Nifty is likely to see traction above the 24,903 mark while the biggest support is seen at 24,336," he said.
Kapoor of Elara Securities said she expects GST related demand boost to add 100 to 120 bps to the GDP growth over next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to US.
"We remain constructive on the uptick in consumption demand in the economy as multiple policy levers turn favorable for the first time in a decade," she added.
GST cuts announced late Wednesday brought early Diwali to stock exchanges NSE and BSE, as stock investor wealth, as suggested by market capitalisation of listed companies, swelled by Rs 3.5 lakh crore on Thursday, within minutes into the opening bell.
The BSE Sensex opened at 81,456.67, up 888.96 points or 1.10 per cent. Nifty advanced 265.70 points or 1.08 per cent to 24,980.75. Investor wealth, as suggested by the BSE market capitalisation, climbed Rs 3.46 lakh crore to Rs 4,56,74,927 crore.
In a landmark decision, the GST Council approved a sweeping rationalization of the GST regime, simplifying the existing four-slab structure into just two brackets: 5 per cent and 18 per cent. The Council though introduced a higher 40 per cent rate for select luxury and sin goods.
Trideep Bhattacharya, President and CIO- Equities Edelweiss MF said the GST 2.0 marks a defining reset for India’s consumption story. By rationalising slabs and lowering rates on mass categories while taxing sin goods higher, the Council has unlocked volume tailwinds for staples, durables and autos, reshaping equity market leadership in the coming years, he said.
Antique Stock Broking said the GST rationalization will help boost consumption, assuming tax multiplier of 1.5-2.3 times, during the upcoming festive period. This is on assumption that the GST benefit to be passed on to consumer. Multiple sectors are likely to benefit like auto, FMCG, insurance, cement, consumer durable, hotels, fashion retail and defence, the brokerage said.
Market veteran Nilesh Shah in an X post on Thursday called the GST slab consolidation and rate rationalisation as “ek teer kai nishaan”. Shah, who is Managing Director at Kotak Mahindra Asset Management Company said the GST reform would not only lower inflation but increase GDP growth and boost consumer sentiment, without disturbing the path of fiscal consolidation. He said the move would improve ease of doing business and partially offsets adverse effects of 'unfair' US tariffs.
Garima Kapoor, Economist and Executive Vice President at Elara Capital said the GST rate changes look favorable especially since there is across the board decline in daily use items including services like hotel rates below Rs 7,500.
"Moreover, very critical items like cement have seen a cut from 28 per cent to 18 per cent, which should be huge positive for the infra sector. The efforts to further ease the compliance burden on tax filers is positive and should aid ease of doing business. Today’s GST rate changes, along with RBI’s rate cuts, income tax rebates announced in FY26 budget and easing inflation are all levers for a consumption uptick in the economy," she said.
Auto makers are expected to gain immensely. The reforms include substantial tax reductions across auto segments while addressing industry worries around the inverted duty structure. Aall auto components now uniformly at 18 per cent against 18-28 per cent earlier). The taxation on EVs was maintained at 5 per cent.
Prashanth Tapse of Mehta Equities said stock market is likely to extend gains as positive global cues coupled with the GST rate rationalisation exercise by the government is expected to boost sentiment.
The GST move is expected to drive sales of several FMCG and white goods items during festive season, which could have a positive impact on the shares of listed companies going ahead, he said.
"However, FII selling spree in local markets and Trump's higher tariffs on India creating growth concerns will continue to weigh on the sentiment. Technically, Nifty is likely to see traction above the 24,903 mark while the biggest support is seen at 24,336," he said.
Kapoor of Elara Securities said she expects GST related demand boost to add 100 to 120 bps to the GDP growth over next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to US.
"We remain constructive on the uptick in consumption demand in the economy as multiple policy levers turn favorable for the first time in a decade," she added.