Indian equity markets witnessed a powerful rally as investors cheered two major developments that significantly improved sentiment. Prime Minister Narendra Modi’s proposal for Goods and Services Tax reforms, coupled with a sovereign credit rating upgrade by S&P Global Ratings, sent benchmark indices soaring on Monday.
The Sensex opened strong and at one point jumped more than one thousand one hundred points during the session, touching an intraday high of 81,765. Investors were betting that lower GST rates would revive consumer demand and strengthen corporate earnings across multiple sectors. By the end of the day, some profit booking at higher levels trimmed gains, but the index still closed up by 676 points at 81,273. The Nifty also surged, crossing the key 25,000 mark for the first time in intraday trade. It eventually settled at 24,876, up 245 points from the previous close.
Investor wealth swelled by an estimated 6.17 lakh crore rupees in a single day, the biggest addition in three months. The rally was broad-based, with automobiles and consumer durables leading the way. Maruti Suzuki gained an impressive nine percent, while Bajaj Finance, UltraTech Cement, Bajaj Finserv and Mahindra and Mahindra added between four and five percent.
Broader market indices outperformed the benchmarks as well. The BSE Midcap index advanced one percent, while the BSE Smallcap index gained nearly one and a half percent. Market breadth was firmly in favour of buyers, with more than 2,500 stocks ending higher compared to around 1,600 losers.
Domestic institutional investors remained strong buyers, picking up more than four thousand crore rupees worth of equities. Foreign portfolio investors also joined in with net purchases worth 550 crore rupees, according to provisional data.
Market experts believe the twin boost of tax reforms and a sovereign upgrade has helped revive optimism. Ajit Mishra, Senior Vice President of Research at Religare Broking, said that investor confidence was lifted by the prospect of stronger demand as well as the comfort of improved fiscal credibility. He noted that while global uncertainties, including ongoing trade discussions with the United States, could still affect momentum, domestic policy support is clearly a positive driver.
Vinod Nair, Head of Research at Geojit Investments, added that the automobile sector is likely to benefit the most from the proposed tax rationalisation. He also suggested that consumption-driven industries could see renewed traction in the second half of the financial year as demand gradually revives.
Sector-wise, the rally was widespread. Automobiles gained more than four percent, consumer durables advanced over three percent, while real estate, metals and commodities also climbed strongly. Information technology, power and technology services were the only sectors that closed with minor losses, highlighting that the rally was concentrated in demand-sensitive areas of the economy.
The session reinforced investor belief that structural reforms can be a powerful catalyst for market performance. As GST proposals move closer to implementation, many expect further clarity on which sectors will gain most. Combined with the confidence boost from India’s sovereign rating upgrade, Monday’s trading action marked a turning point in market sentiment after weeks of cautious moves.
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