Market Surges: Sensex Jumps 700 Points, Nifty Crosses 24,900 on GST Reforms, Strong Sentiment

Market Surges: Sensex Jumps 700 Points, Nifty Crosses 24,900 on GST Reforms, Strong Sentiment

Indian Stock Market Today: Bullish Surge on Tax Cut Optimism

Date: September 4, 2025

Today, the Indian stock market witnessed a strong rally as both benchmark indices—Nifty 50 and BSE Sensex—closed with significant gains. The positive momentum was largely fueled by the government’s recent announcement of major GST (Goods and Services Tax) cuts, aimed at boosting consumption ahead of the festive season.

Why Was the Market Bullish Today?

Government’s Major GST Reforms:

• The central government announced a simplified GST structure, reducing the number of tax slabs to just two and lowering rates on several essential and consumer goods.

• These new rates will come into effect from September 22, 2025, providing immediate cheer to consumer-facing sectors.

• The reforms are expected to stimulate household spending and counter global tariff pressures, especially from ongoing trade concerns with the US.

        This development significantly lifted market sentiment, particularly in the FMCG, auto, and metals sectors.

Key Market Numbers

• Nifty 50 closed 0.53% higher at 24,845.3

• BSE Sensex rose 0.55% to close at 81,014.6

In early trade:

• Sensex rallied over 700 points

• Nifty 50 surged past the 24,900 mark

• GIFT Nifty was also trading at a premium, indicating strong investor sentiment before the market opened

Even as the day progressed, the indices maintained their gains, closing with broad-based buying across sectors.

Sectoral Highlights

Auto Sector:

• Automakers saw strong buying as lower GST rates on vehicles are expected to boost sales during the upcoming festive season.

• Notable gainers included Mahindra & Mahindra (up ~6%) and Eicher Motors (up ~3%).

FMCG (Fast-Moving Consumer Goods):

        Stocks like Britannia, Nestlé, and Colgate-Palmolive gained between 2% to 6% as the tax cuts are likely to drive rural and urban                  consumption alike.

Metals:

• Metal stocks rallied on hopes of increased infrastructure activity and lower input costs.

• The Nifty Metal index ended higher by over 1.5%.

Other Sectors:

• Consumer durables, real estate, and banking also witnessed healthy buying interest.

• All major sectoral indices, except IT, closed in the green.

Market Drivers Behind Today’s Rally

a. Tax Cuts = Demand Boost:

• By reducing GST on everyday and high-value consumer goods, the government is attempting to increase consumer spending—just in time for Diwali and Dussehra.

b. Festive Season Expectations:

• Historically, Q3 and Q4 of the financial year tend to be strong for consumption-led sectors. The GST cut announcement has magnified these expectations.

c. Global Cues and Technicals:

• Asian markets traded higher, providing positive global sentiment.

• The US dollar weakened slightly, improving emerging market attractiveness.

• Technical indicators for both Sensex and Nifty suggest bullish momentum is likely to continue in the short term.

5. Rupee Watch

• The Indian Rupee traded steady against the US Dollar at ₹88.1225.

• Despite today’s upbeat domestic sentiment, the rupee continues to underperform compared to other Asian currencies like the South Korean Won and Chinese Yuan.

• So far in 2025, the rupee has depreciated by nearly 3%.

6. Investor Sentiment and FII Participation

• Domestic investors remained net buyers, with strong inflows into equity mutual funds and retail participation.

• Foreign Institutional Investors (FIIs), who were net sellers in the previous week, turned marginal net buyers today—driven by optimism around pro-consumer reforms.

7. Analyst Take

According to financial analysts and economists:

“The recent tax cuts could add 100–120 basis points to India’s GDP in the next two quarters if implemented efficiently. This, combined with easing inflation and policy continuity, sets the stage for a robust festive season.”

Brokerages like Jefferies and Nomura have revised their short-term outlooks on Indian equities from “neutral” to “positive.”

Summary Table

Outlook Ahead

The next few sessions will be crucial to see if the current momentum can sustain. Investors will be watching for:

• Further details or clarifications on GST reforms

• Monthly auto sales and inflation data

• FII flows and global central bank actions

As of now, Indian equity markets are riding a strong wave of optimism backed by policy support, consumption potential, and favorable global tailwinds.