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Informist, Wednesday, Sept. 3, 2025

By Gopika Balasubramanium

MUMBAI – The equity indices are expected to start Thursday's session on a positive note, but their direction thereafter will depend on the Goods & Services Tax Council's decision on the government's proposal to rationalise rates, analysts said. Consumer-facing sectors such as fast-moving consumer goods, consumer durables, automobiles, and the like will be in focus.

"Initially, Nifty (50) index likely to trade with slightly positive bias; however, later during the second half, direction will largely depend on GST Council meeting outcome that might act as a trigger point," Vipin Kumar, assistant vice-president of derivatives and technical at Globe Capital Market, said. The current sell-on-rise approach can be continued as long as the 50-stock index stays below 24850 points, he said.

The 56th meeting of the GST Council, which began Wednesday, assumes importance after Prime Minister Narendra Modi's announcement in his Independence Day speech about a "Diwali gift" of a lower GST burden. Earlier Wednesday, Opposition-ruled states agreed to the overall intent of lowering the GST burden but said they would seek a mechanism to shield them from the consequent revenue loss. The government has proposed to reclassify items under the 12% and 28% GST slabs to 5% and 18%, respectively. 

"The upcoming changes to the GST, likely on 4-Sep-25, should trigger a decisive, consumption-led turn in India's growth cycle," Seshadri Sen, head of research at Emkay Global Financial Services, said in a strategy report. This adds to earlier stimulus measures like welfare spending and monetary easing. "India's earnings cycle is bottoming out and this could be the catalyst for an upgrade cycle to kick in," he said.

Echoing the view, Vinod Nair, head of research at Geojit Investments Ltd., said, "In the near term, market sentiment hinges on the outcome of the GST Council meeting with traction on consumption-oriented stocks and sectors.... the expectations are very high, increasing the risk of disappointments, which can kickstart consolidation again," he added.

The Nifty 50 closed Wednesday at 24715.05 points, up 135.45 points or 0.6%, after remaining in a thin range between 24533.20 points and 24737.05 points during the day's session. Metal stocks surged during the session after China said it was set to reduce its steel capacity and production during 2025. The BSE Sensex closed 0.5% higher at 80567.71 points, up 409.83 points. Technical analysts expect the Nifty 50 to find support at 24600–24500 points and face resistance at 24750–24800 points for the near term.

"We maintain our Sep-26 Nifty target at 28,000 and stick to discretionary as our biggest OW (overweight)," Sen of Emkay Global said in the strategy report. "The best way to play the cycle is through the auto ecosystem--OEMs (original equipment manufacturers), ancillaries, and lenders."  End

Edited by Rajeev Pai

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