Sensex jumps 676 pts as GST reform bid sparks rally in auto, consumer durable shares

Mumbai, Aug 18 (PTI) Stock markets rose sharply on Monday, with Sensex closing higher by 676 points and Nifty climbing 1 per cent on heavy buying in auto and consumer durables stocks, buoyed by plans for big bang reforms in the GST regime by Diwali.

The 30-share BSE Sensex jumped 676.09 points or 0.84 per cent to settle at 81,273.75. During the day, it zoomed by 1,168.11 points or 1.44 per cent to 81,765.77.

The 50-share NSE Nifty climbed 245.65 points or 1 per cent to end at 24,876.95. Intra-day, it surged 390.7 points or 1.58 per cent to 25,022.

The global rating agency S&P's upgrade of India's sovereign credit rating, as well as US-Russia talks over the Ukraine war, also boosted market sentiment, analysts said.

Among Sensex firms, Maruti zoomed the most by 8.94 per cent. Bajaj Finance rallied over 5 per cent, UltraTech Cement by 3.71 per cent, and Bajaj Finserv by 3.7 per cent. Mahindra & Mahindra, Hindustan Unilever and Trent were also among the gainers.

However, ITC was the biggest loser, dropping by 1.26 per cent. Eternal, Tech Mahindra and Larsen & Toubro also declined.

"The proposed rationalisation of GST is a sentiment booster for the domestic market. Additionally, the recent conclusion of the US and Russia summit, without any escalation in geopolitical tensions, has helped ease investor anxiety,” Vinod Nair, Head of Research, Geojit Investments Limited, said. “The automobile sector outperformed, emerging as a key beneficiary of the anticipated tax reforms," Nair added.

The BSE auto index jumped 4.26 per cent to 56,233.33. Hyundai Motor India jumped 8.45 per cent, Ashok Leyland by 8.12 per cent, TVS Motor by 6.58 per cent and Hero MotoCorp by 5.9 per cent.

The Centre has proposed a 2-tier GST structure of 5 per cent and 18 per cent, besides a 40 per cent special rate on a select few items to the GoM on GST rate rationalisation.

The proposal, which entails removing the current 12 per cent and 28 per cent tax slabs, will be discussed at the two-day meeting of the state ministerial panel on August 20 and 21 in the national capital, according to sources.

Prime Minister Narendra Modi had announced the proposal to reform the GST law in his Independence Day speech on August 15 from the ramparts of the Red Fort.

The BSE smallcap gauge jumped 1.39 per cent while midcap index climbed 1 per cent.

Among BSE sectoral indices, auto surged 4.26 per cent, consumer durables (3.08 per cent), consumer discretionary (2.74 per cent), realty (2.19 per cent), commodities (1.96 per cent), metal (1.95 per cent) and services (1.30 per cent).

IT, power, teck and BSE Focused IT were the laggards.

As many as 2,560 stocks advanced while 1,629 declined and 176 remained unchanged on the BSE.

"Markets staged a strong rally on Monday and ended with gains of over a per cent. The positive sentiment was driven by GST reform proposals, easing concerns over crude oil prices, and a sovereign rating upgrade, which together lifted investor confidence," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

In Asian markets, Japan's Nikkei 225 index and Shanghai's SSE Composite index settled in positive territory while South Korea's Kospi and Hong Kong's Hang Seng ended lower.

European markets were trading in negative territory.

The US markets ended mostly lower on Friday.

Global oil benchmark Brent crude climbed 0.62 per cent up to USD 66.25 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,926.76 crore on Thursday, according to exchange data.

On Thursday, the Sensex climbed 57.75 points or 0.07 per cent to settle at 80,597.66. The Nifty rose by 11.95 points or 0.05 per cent to 24,631.30. Equity markets were closed on Friday for Independence Day. PTI SUM MR MR