Nifty Reclaims 25,000: GST Reforms To Sectoral Rallies, Three Key Drivers
Nifty 50 reclaimed its bull run fueled by a confluence of three major factors, including expectations around GST reforms, Trump-Putin summit in Alaska and a rally by the consumer-driven sectors.
Domestic market's benchmark Nifty 50 index reclaimed the 25,000 mark after volatile 24 sessions. The rally has been fueled by a confluence of three major factors, including expectations around sweeping GST reforms announced by the Prime Minister Narendra Modi on Independence Day 2025.
The demand outlook for sectors like auto and consumption turned positive over the potential GST reforms expected around Diwali 2025. Additionally, geopolitical developments followed by Trump-Putin summit in Alaska have boosted hopes of a lower tariff rate on India by the US. Together, the events have boosted the market sentiment alongside the benchmarks to trade higher. These have triggered sectoral rallies and created a bullish outlook across domestic markets.
GST Overhaul
PM Modi on Independence Day announced a major GST overhaul branding it as Diwali gift to the citizens of the nation. The proposed reforms has sparked a rally across consumption driven sectors. The reform aims to simplify the tax structure by reducing the number of slabs and shifting the categorisation.
Multiple sectors including auto, FMCG and consumer durables are poised for gains, with the tax cut on dairy, packaged foods, and appliances like ACs and TVs. Moreover, analysts across brokerages see this as a big catalyst for consumption and remain bullish.
Trump-Putin Summit
The recent summit between US President Donald Trump and Russian President Vladmir Putin in Alaska, although inconclusive, has sent positive signals to global markets. The leaders discussed the Ukraine conflict, trade relations, and Arctic cooperation, with both sides expressing interest in continued dialogue.
Trump remarks about seeking a negotiated settlement and distancing Russia from China have been interpreted as moves to reduce geopolitical tensions. For India, this likely means reduced volatility and improved trade prospects, especially if sanctions ease and global energy market stabilises.
Sectoral Surge
The market rally has been broad-based, with several key sectors posting strong gains on Monday. Nifty Auto jumped 4.50%, on the back of anticipated GST cuts, with stocks like Hero MotoCorp, Bajaj Auto, TVS, and Maruti Suzuki leading the charge.
Nifty consumption rose 2.42% driven by optimism around lower taxes on packaged foods and beverages, benefiting companies such as Britannia, Nestle, Tata Consumer and Dabur.
Nifty Realty gained 2.38%, while Nifty MNC was up 3.03%, reflecting improved investor sentiment across the board. Consumers durables also saw a boost, with potential GST cuts on ACs, TVs and dishwashers expected to benefit Voltas, Blue Star, Havells, and Dixon Technologies.
