Mumbai: Benchmark equity indices surged in early trade on Thursday after the GST Council approved a landmark overhaul of the Goods and Services Tax (GST) regime, boosting investor confidence. Meanwhile, the rupee ended almost flat in choppy trade as foreign fund outflows and a stronger dollar limited gains.
Equities in Focus
The 30-share BSE Sensex soared 888.96 points to 81,456.67 in opening trade, while the NSE Nifty jumped 265.7 points to 24,980.75.
Investors cheered the GST Council’s decision to cut the tax structure down to just two slabs, 5 per cent and 18 per cent, from September 22, the first day of Navaratri. The overhaul will lower consumer bills for daily-use items such as roti, paratha, hair oil, ice creams, and televisions, while life and health insurance will be kept out of GST.
Among Sensex constituents, Mahindra & Mahindra led gains with a surge of over 7.5 per cent, followed by Bajaj Finance, Hindustan Unilever, Bajaj Finserv, ITC, Tata Motors and UltraTech Cement. In contrast, Eternal, Tata Steel, NTPC and HCL Tech witnessed some selling pressure.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, called the GST revamp “revolutionary,” saying it would spur consumption and support India’s growth momentum, though tariff-related issues could weigh on markets after the initial euphoria.
In global markets, Japan’s Nikkei 225 and South Korea’s Kospi traded higher, while Shanghai’s SSE Composite and Hong Kong’s Hang Seng edged lower. Overnight, Wall Street closed mostly in the green.
On the flow side, FIIs sold ₹1,666.46 crore worth of equities on Wednesday, while DIIs bought stocks worth ₹2,495.33 crore, according to exchange data.
Brent crude prices slipped 0.56 per cent to USD 67.22 per barrel, offering some relief on the macro front.
Rupee Movement
The rupee slipped 1 paisa to 88.03 per US dollar in Thursday’s volatile trade despite upbeat domestic sentiment.
At the interbank forex market, the local unit opened weaker at 88.09, strengthened to 87.85, but eventually settled at 88.03, down 1 paisa from Wednesday’s close. A day earlier, the rupee had recouped 13 paise from record lows to close at 88.02.
Forex experts said the twin drivers of a positive GST shake-up and falling oil prices limited rupee weakness, though persistent foreign portfolio outflows and dollar demand restricted gains.
“The rupee opened weaker but gained on inflows before retreating again. The immediate trading range is likely between 87.90 and 88.40,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.
The US dollar index rose 0.07 per cent to 98.21, while Brent crude slipped 0.49 per cent to USD 67.27 per barrel ahead of the upcoming OPEC+ meeting, where producers are expected to discuss further output hikes.
Macro Snapshot
Adding to the bullish undertone, India’s services sector growth hit a 15-year high in August, with the HSBC India Services PMI climbing to 62.9 from 60.5 in July, the strongest expansion since June 2010.
With inputs from PTI
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