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Sensex, Nifty surge over 1% each as GST rationalisation boosts sentiment

Nifty-Sensex Today, GST council tax slabs: The BSE’s Sensex surged 1.01 per cent, or 888.96 points, to open at 81,456.67, compared to the previous close of 80,567.71. The broader Nifty rose 1.07 per cent, or 265.7 points, to open at 24,980.75.

The NSE Nifty 50 was up 1.08 per cent at 24,980.75 and the BSE Sensex gained 1.1 per cent to 81,456.67.

GST council tax slabs: Domestic benchmark equity indices, Sensex and Nifty, rallied over one per cent each on Thursday, as investors’ sentiment improved after the GST council, headed by Finance Minister Nirmala Sitharaman, announced the biggest overhaul of the eight-year indirect tax regime.

The council abolished the multiple rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent, and introduced a two-slab structure of 5 per cent and 18 per cent – a move that will help boost domestic demand amid global uncertainties.

The BSE’s Sensex surged 1.01 per cent, or 888.96 points, to open at 81,456.67, compared to the previous close of 80,567.71. The broader Nifty rose 1.07 per cent, or 265.7 points, to open at 24,980.75.

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The new GST rates, to be effective from September 22 – the first of Navratri – will lower the prices of most daily use items such as packaged and branded food items, hair oil, soaps bars, shampoos, toothbrushes, bicycles. All life and health insurance plans purchased by individuals have been exempted from the levy of GST. Super luxury and sin goods will be taxed at 40 per cent.

“The revolutionary GST reform has come better than expected benefitting a wide spectrum of sectors. The ultimate beneficiary is the Indian consumer who will benefit from lower prices. The potential big boost to consumption in an economy that is already in growth momentum will be big and may surprise on the upside,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

Stocks in sectors as varied as automobiles, FMCG, white goods, cement and insurance will be the focus of attention of the bulls. Autos are likely to outperform. There is a high probability of short covering today pushing prices higher than expectations, he said.

Rationalisation of GST will partially help offset the adverse impact of US tariff in the quarters to come, said Nilesh Shah, Managing Director, Kotak Mahindra AMC.

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The GST rates have been reduced for white goods such as air conditioners, television sets, and dishwashing machines to 18 per cent from 28 per cent. Small cars with engine capacity not exceeding 1200 cc (petrol) and 1500 cc (diesel) and with length not over 4 metre will now be in the 18 per cent slab.

“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. We expect 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 the US,” said Garima Kapoor, Economist and Executive Vice President, Elara Capital.

Major sectoral indices were trading in green, with Nifty Auto rising 2.06 per cent and Nifty FMCG gaining 1.67 per cent. Among the NSE lot, the companies that gained the most included Mahindra & Mahindra (7.27 per cent), Bajaj Finance (4.96 per cent) Eicher Motors (3.27 per cent) , Hindustan Unilever (2.54 per cent) and Nestle India (2.43 per cent).

State-run Life Insurance Corporation of India (LIC) gained 2.2 per cent. Other insurance players such as ICICI Prudential Life Insurance, ICICI Lombard General Insurance and HDFC Life Insurance were up 1.30 per cent, 2.42 per cent and 1.43 per cent, respectively, on the BSE.