Stock market: Sensex soars 1,000 pts, Nifty nears 25K; Hero Moto, Maruti rally

Benchmark equity indices Sensex and Nifty climbed over 1 per cent in each in Monday's trade, with stock investor wealth rising nearly Rs 6 lakh crore within minutes, as the Prime Minister Narendra Modi announced rolling out of a major round of GST reform by Diwali, which would not only simplify the rate structure but reduce the tax burden on key categories. The move is seen boosting consumption demand, especially for automobiles and consumer durables.

There are strong tailwinds for the market with potential to take it higher, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"Declarations by the prime minister on the next major reforms in GST by Diwali, is a big positive. The expectation is that most of the goods and services will be in the 5 per cent and 18 per cent tax slabs. Sectors like autos and cement which are presently in the 28% tax slabs are expected to benefit," Vijayakumar said.

By 9.16 am, the BSE Sensex was trading 926.80 points or 1.15 per cent higher at  81,524.46. The index hit a high of 81,619.59. At level, the 30-pack index was up 1,021 points. The Nifty50 was trading at 24,932.15, up 302.25 points or 1.22 per cent. Investor wealth, as suggested by BSE market capitalisation climbed 5.73 lakh crore to Rs 4,50,52,064.66 crore.

Among auto stocks, Hero MotoCorp surged 8.36 per cent to Rs 5,009. Maruti Suzuki India led the Sensex gainers. It was up 6.06 per cent at 13,703.20 apiece. TVS Motor, Bajaj Auto, Ashok Leyland, Hyundai Motor India gained 4-5 per cent each.

A common rate of tax for small cars and SUVs may hand a significant advantage to SUVs, but electric vehicles, currently at 5 per cent GST rate, may see a meaningful impact on demand as the price gap with ICE will likely increase sharply, Nomura India said in a note.

The brokerage noted that cars could be placed in a slab to end disputes arising due to classification by engine size and length. If the GST rate is lowered for the auto sector by 10 per cent, it could boost demand by 15-20 per cent, Nomura estimated

Among Sensex stocks, Bajaj Finance gained 4.20 per cent to Rs 898. Bajaj Finance may gain, said MOFSL, as EMI obligation for consumer durables should reduce, benefitting NBFC lending in this segment.

UltraTech Cement, Hindustan Unilever, Bajaj Finserv, Trent and Axis Bank advanced over 3 per cent each. Voltas soared 7 per cent while Havells advanced 4 per cent, as the two companies are also seen gaining from a likely reduced GST rate.