Stock Market Today: Why Nifty 50, Sensex Are Rallying? Thank GST Cuts And Domestic Inflows

Indian stock markets rallied on Thursday after the Good and Services Tax Council delivered what the markets and the public have long wanted — simpler GST structure and lower rates for consumer goods.

The Nifty 50 and BSE Sensex rose for the second day. Both benchmarks jumped as much as 1.1% during early trade.

Despite the upbeat sentiment, the Nifty faced resistance at the 25,000 level as the most it could reach intraday was 24,980. On the downside, the support is placed at 24,650.

Mahindra & Mahindra Ltd., HDFC Bank Ltd. and ICICI Bank Ltd. were the top points contributor to the Nifty.

On the BSE, 2,170 stocks out of 3,357 traded in green, while just over 1,000 saw declines.

The broader market performed as good as the benchmarks. The Nifty Midcap 150 and Nifty Smallcap 250 gained 1.1% each.

Among sectors, Nifty Auto, Nifty FMCG and Nifty Consumption rallied the most as companies in these sectors are primed to benefit from the GST rate cuts.

Escorts Kubota Ltd., Mahindra And Mahindra Ltd. and Eicher Motors Ltd. surged the most in the auto pack. Small cars and entry-level bikes are set to get cheaper as the GST Council on Wednesday approved a complete overhaul of the tangled GST regime.

FMCG giants like Nestle India Ltd. and HUL also marked gains of over 2%. The GST has been slashed on an array of food items, including packaged namkeens, instant noodles, chocolates, and coffee, from either 12% or 18% to a uniform 5%.

Indian equities have been finding support from domestic institutional funds for over a month even as foreign portfolio capital moved out.