Stock markets advance for 2nd day after GST rate cut

Benchmark stock indices Sensex and Nifty pared most of the early gains to settle marginally higher on Thursday as profit taking in index heavyweight Reliance Industries and Infosys took away the sheen of the GST rate cuts announced on commonly used personal items and daily essential products.

Shedding 738 points from the day’s high, the 30-share Sensex finally settled 150.30 points or 0.19 per cent higher at 80,718.01. As many as 19 of its shares closed in red while 11 settled higher. The barometer jumped 888.96 points or 1.10 per cent to a high of 81,456.67 in the opening trade as the GST Council approved a complete overhaul of the tangled Goods and Services Tax regime. However, stock markets trimmed gains later due to profit-taking in blue-chips. The 50-share NSE Nifty ended marginally higher by 19.25 points or 0.08 per cent at 24,734.30 after surging 265.7 points or 1.07 per cent to 24,980.75 in opening trade.

“After a promising start, the domestic market closed almost flat as profit-booking emerged across the market except for consumption-oriented beneficiary sectors such as auto, finance, and FMCG. In-line outcome of GST rationalisation and ongoing tariff threats from the US exerted a negative impact on the market today,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

Common use items from roti/paratha to hair oil, ice creams and TVs will cost less, while tax incidence on personal health and life insurance will be brought down to nil after the all-powerful GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax (GST) regime. The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri. Among the Sensex firms, Mahindra & Mahindra jumped the most by 5.96 per cent. Bajaj Finance, Bajaj Finserv, Trent, ITC and HDFC Bank were also among the gainers. However, Maruti Suzuki India, Bharat Electronics, HCL Tech, NTPC, Power Grid, Infosys and Reliance Industries were among the laggards.

“Nifty opened on a strong note with a gap-up start, driven by optimism around the new GST rates, but profit-booking in the second half wiped out most of the early gains. “The move triggered broad-based buying in auto, FMCG, and consumer durable stocks during early trade. However, profit-booking weighed on broader indices, dragging them down,” Hariprasad K, Research Analyst and Founder - Livelong Wealth, said.

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