Indian markets looked set for a robust session today morning, however, soon indices eroded all gains and tried to recover as trading progressed. The BSE Sensex settled the session above 80,700, jumping just over 150 points, while the NSE Nifty50 ended trading at 24,740, inching up 25 points.
The sentiment in the market remained robust, however, indices fell after heavy profit booking seen during the day. Further, foreign outflows also influenced investors and resulted in the benchmarks paring their gains. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,666.46 crore on Wednesday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,495.33 crore, according to exchange data.
During opening, Sensex soared nearly 700 points, while the Nifty climbed over 200 points, following the landmark GST reforms announced on Wednesday. The momentum had been hinted at earlier in the day, with GIFT Nifty surging past 24,950 after a rise of over 100 points by 9 AM.
On the 30-share Sensex, M&M, Bajaj Finance, Bajaj Finserv, Trent, and ITC settled among the gainers. Meanwhile, the laggards included Maruti, BEL, HCL Tech, PowerGrid, and Infosys closed among the laggards.
In the broader markets, indices bled across the board. The Nifty Smallcap100 and Nifty Smallcap50 indices declined 0.71 per cent each. Sectorally, the PSU Bank tanked more than 1 per cent, followed by the Oil & Gas index which slipped 0.96 per cent.
GST Council’s Major Decision
The rally followed the GST Council’s decision to implement a simplified two-slab structure of 5 per cent and 18 per cent, along with a 40 per cent bracket reserved for luxury and sin goods. The new system, set to take effect from September 22, replaces the current four-tier framework and eliminates the 12 per cent slab.
Relief on Everyday Goods
Essential commodities and mass-consumption products will see significant rate reductions. Items such as butter, ghee, biscuits, dry fruits, bottled water, fruit juices, namkeen, ice cream and milk-based beverages will move from 18 per cent to 5 per cent. Footwear and garments up to Rs 2,500 will also attract 5 per cent GST, compared with the earlier Rs 1,000 limit. Similarly, toothpaste, soap, shampoo and hair oil will now be taxed at 5 per cent instead of 18 per cent.
Sitharaman also clarified that sin goods like tobacco will continue under the existing regime until compensation cess dues are cleared. Equities had already closed Wednesday with modest gains, with the Sensex at 80,550 and the Nifty above 24,700. Thursday’s session, however, highlighted how strongly investors welcomed the sweeping GST overhaul.
