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Informist, Thursday, Sept. 4, 2025                                      Tel +91 (22) 6985-4000

Equity Alert: Market gains sharply post GST rate rejig, auto cos lead

MUMBAI--0945 IST--Benchmark indices opened significantly higher Thursday after the GST Council Wednesday approved a move to a two-slab goods and services tax rate structure with cut in tax rates on several consumer-related goods. The indices rose past their resistance levels. Consumer-facing sectors such as automobile and fast-moving consumer goods lead the gains in the market. 

At 0940 IST, the Nifty 50 was at 24906.30, up 191.25 points or 0.8% and the BSE Sensex was at 81218.17, up 650.46 points or 0.8%. Mid-cap stocks outperformed large-cap ones, while small-cap stocks swung between gains and losses up. The India VIX, the fear gauge of the market, fell after opening higher and was down 0.9% at 10.8375. 

Shares of car manufacturing companies rose sharply after the GST on small cars was reduced and the cess on bigger ones was removed in the latest GST reforms late Wednesday. Mahindra & Mahindra and Tata Motors were up over 7% and 1%, respectively. Truck and tractor makers' stocks also soared after the GST Council cut the GST on them to 5% from 12%, and 18% from 28%, respectively. Shares of two-wheeler companies rose with Eicher Motors up over 3% and TVS Motor up nearly 2%. GST on motorcycles below 350cc engine has been reduced to 18%. Nifty Auto was up over 2% and led the pack. 

FMCG stocks gained sharply as the GST on several daily-use products has been cut. Britannia Industries was up 5.7%, being among the top gainers in the Nifty 200. Nestle India was up nearly 3%. ITC was up over 2% as the GST Council approved taxing cigrettes based on retail sale price. Nifty FMCG was the second biggest gainer after Nifty Auto, up 1.5%.

Insurance companies stocks rose after life and health insurance policies were exempted from GST. Nifty Financial Services was up 0.9%. Nifty IT, Nifty Oil & Gas, and Nifty Metal were the only sectors that were in the red.  (Simran Rede)

Equity Alert: Indices seen sharply up after GST body cuts rates on many pdts

MUMBAI--0805 IST--Benchmark indices are likely to open higher Thursday after the Goods and Services Tax Council approved lowering tax rates on several consumer-related goods. Shares of several companies in automobile, fast-moving consumer goods, consumer durables, among others, are expected to rise.

The GST Council removed the 28% and 12% GST slabs and brought most products under the 5% and 18% slabs. It also introduced a 40% tax slab for luxury and sin goods and removed compensation cess on most products. The new rates are set to be effective from Sept. 22, except those on tobacco-related items.

Following this, GIFT Nifty futures contracts surged overnight, indicating a sharply higher gains for the Nifty 50. At 0735 IST, the September GIFT Nifty contracts traded at 24975 points, up 0.6% from its previous close and 1.1% from the Nifty 50's close Wednesday. The Nifty 50 had ended Wednesday's session at 24715.05 points.

While the Nifty 50 is likely to rise, gains might be limited as several consumption-related stocks have already seen significant gains in anticipation of the GST rate rationalisation. The Nifty Auto and Nifty Consumer Durables indices have gained nearly 7% each since Prime Minister Narendra Modi first announced plans of the GST cuts in his Independence Day speech. The FMCG index has gained over 4% since the speech.

The GST Council reduced tax on small cars, with engine below 1200 cc, to 18% from 28%. It increased the GST on mid-size and big cars to 40% from 28% but removed compensation cess. This is a positive development as these cars were earlier taxed at 45-50%, including the cess, and the overall tax on these cars will now come down to 40%. Shares of car makers such as Tata Motors, Maruti Suzuki, Mahindra & Mahindra, among others, are expected to rise.

The council reduced the GST on motorcycles under 350 cc engine to 18% from 28%, which is likely to be positive for Hero MotoCorp and TVS Motor Company. However, the council raised GST on motorcycles above 350 cc engine to 40% from 28%, which may impact shares of Royal Enfield-owner Eicher Motors. It also reduced GST to 18% for buses and trucks from 28% earlier, which will be positive for Ashok Leyland. Among others, it has cut GST on tractors, tractor tyres to 5%.

Among FMCG products, the council reduced GST on namkeens to 5% from 12%, which likely aid shares of Bikaji Foods. It cut GST on pasta and noodles to 5%, which is positive for Nestle India. It reduced the GST on Indian breads to nil, and cut GST on daily-use items such as hair oil, soap, shampoo, toothbrush to 5%. However, the council raised the GST on drinks with added sugar, carbonated beverages to 40% from 28% earlier. This could be negative for Dabur India and Varun Beverages.

The council has also exempted all individual life insurance, health insurance policies from the GST. This is likely to be positive for several insurance companies such as Life Insurance Corp. of India, HDFC Life Insurance Co., SBI Life Insurance Co., among others.

Global cues were mixed with indices in China and Hong Kong sharply down in the morning while those in South Korea and Japan were up. US indices overnight were mixed with the Nasdaq Composite ending over 1% higher but Dow Jones Industrial Average was slightly down. (Anshul Choudhary)

Equity Alert: Most Asian mkts rise on rate cut hopes post soft US econ data

MUMBAI--0801 IST--Most Asian equity indices rose in early trade Thursday after soft employment data in the US led to hope of a rate cut by the Federal Reserve at its September meeting. The Japanese market was the biggest gainer in early trade, with the Nikkei 225 and Topix up 1.1% and 0.7%, respectively. 

Gains in indices in Japan were led by banks and technology stocks as a pause in the rise of bond yields globally improved sentiment, Bloomberg reported. A rise in US technoogy stocks on Wednesday also aided tech majors in the region. Sony Group Corp. rose 3% and was among the biggest gainers in the market. "The selling pressure we saw yesterday from the rise in long-term bond yields has calmed, allowing investors to repurchase stocks," Bloomberg quoted Yutaka Miura, senior technical analyst at Mizuho Securities, as saying.

However, China's CSI 300 was down 1.5% and was the worst hit in the region. Reports said the country's financial regulators are considering cooling measures for the stock market as they grow concerned about the huge rally since the beginning of August. The Chinese market has gained nearly 8% during this period. The CSI 300 has surged more than 20% from its year's low.

Following were the levels of key Asian indices at 0757 IST:

(Akash Mandal)

Equity Alert: Nasdaq, S&P 500 rebound on Alphabet surge, econ data caps gains

MUMBAI--0739 IST--The Nasdaq Composite and the S&P 500 rebounded, while the Dow Jones Industrial Average ended slightly lower Wednesday as soft economic data capped gains. Heavyweight Alphabet surged on a favourable ruling in the ongoing antitrust case, helping the overall market end higher despite economy-related concerns.

Job openings in the US fell 176,000 to a 10-month low of 7.18 million in July, lower than the forecast of 7.28 million by Reuters. The metric is an indicator for labour demand in the economy. Despite cooling demand for workers, layoffs remained relatively low and fewer workers engaged in job-hopping, the US Labor Department's data showed.

Among stocks, Alphabet surged after a US district court ruled that Google could keep its Android operating system and Chrome browser, which investors had feared would be stripped by the ruling. The stock notched an all-time high following the ruling. 

However, persistent high bond yields globally weighed on the equity market. Investors are concerned that the upward pressure on long-term government bond yields creates headwinds for equity valuations, Reuters cited Bill Sterling, global strategist at GW&K Investment Management, as saying. The 30-year Japanese government bond yield hit an unprecedented 3.28% on Wednesday, a day after selloffs in similarly dated British gilts, US Treasuries and Canadian bonds, Reuters reported.

Following are the closing levels of US indices Wednesday:

(Akash Mandal)

End

US$1 = INR 88.07

Edited by Vandana Hingorani

All prices from National Stock Exchange, unless otherwise specified.

All percentage changes for share prices are rounded off to the nearest whole number; percentage changes for index values are rounded off to one decimal place.

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