Sensex jumps over 250 pts, Nifty tops 24,800 as GST optimism drives rally to third day

Indian benchmark indices Sensex and Nifty pushed higher for a third day in a row on Friday, lifted by optimism over sweeping tax changes proposed under the “GST 2.0” regime. Heavyweights Reliance Industries and HDFC Bank led advances on the benchmarks, helping sustain the week’s upward momentum.

The BSE Sensex traded 280.01 points, or 0.35%, higher at 80,998.02, while the NSE Nifty added 82.70 points, or 0.33%, to 24,817.

On the 30-share Sensex, Mahindra & Mahindra, Trent, Tata Motors, Asian Paints and Power Grid were among the top gainers, each rising between 1% and 2%.

Sectorally, the Nifty Auto index advanced 1.1%, while the Nifty FMCG index slipped 1%. Auto and consumer stocks had been the biggest drivers in the previous session after the Goods and Services Tax Council approved a two-rate structure and lowered levies on everyday goods to stimulate demand.

Broader markets also firmed, with mid-cap stocks adding 0.3% and small-caps edging up 0.2%.

In individual movers, Reliance Communications shares fell 3% after the company said Bank of Baroda had classified the loan accounts of both the firm and its former promoter and director, Anil Ambani, as “fraud.”

Expert Views

Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, said the rally seen earlier in the week lost steam as “the initial enthusiasm witnessed in the market yesterday couldn’t be sustained” and the anticipated short-covering failed to materialize, pulling prices lower by the close.

Vijayakumar said that markets had already “partly discounted the GST reforms” and that elevated valuations, coupled with geopolitical and tariff-related headwinds, allowed bears to build short positions. He pointed out that mutual funds remain a strong counterforce, with “sustained massive buying in equities touching Rs 70,500 crore in August,” adding that steady fund inflows would continue to support markets during downturns.

According to Vijayakumar, the current trend shows weakness in expensive mid-cap and small-cap stocks, while large-caps that are more reasonably valued are displaying resilience — “a healthy trend which can be expected to continue.”

Global Markets

Asian equities advanced Friday, tracking Wall Street’s record close, while U.S. Treasury yields slipped to four-month lows as investors firmed up bets on a Federal Reserve rate cut later this month. Traders shrugged off caution ahead of a closely watched U.S. jobs report due later in the day.

Gold steadied after pulling back from an all-time high in the previous session. Markets are now almost certain the Fed will deliver a quarter-point reduction when it concludes its two-day policy meeting on Sept. 17, with futures pricing in about 60 basis points of easing over the remainder of the year, according to Reuters.

Economic data on Thursday showed U.S. jobless claims rose more than expected, while private-sector hiring slowed in August, adding to signs of a cooling labor market.

Futures pointed to further modest gains in U.S. stocks, with S&P 500 contracts up 0.1% and Nasdaq futures advancing 0.3%.

In Asia, Japan’s Nikkei rose 0.8% and Taiwan’s benchmark also climbed 0.8%, with both markets hovering near record highs. Hong Kong’s Hang Seng and mainland Chinese blue chips each gained about 0.4%.

FII/DII Tracker

On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 106 crore on September 4, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 2,233 crore.

Crude Impact

Oil prices edged lower for a third consecutive session Friday as traders looked ahead to an OPEC+ meeting this weekend that could weigh potential increases in supply.

Brent crude futures slipped 23 cents, or 0.3%, to $66.77 a barrel in early Asian trading, while U.S. West Texas Intermediate lost 19 cents, or 0.3%, to $63.29.

Rupee vs Dollar

The Indian rupee inched up by 1 paisa to 88.11 against the U.S. dollar in early trading Friday, supported by a softer greenback and easing global crude prices.

The dollar index, which tracks the U.S. currency against six major peers, slipped 0.1% to 98.095, retracing part of Thursday’s gains. Still, the index remains up 0.3% for the week.

(with inputs from agencies)