Bulls Take Over As Sensex Climbs 1,100 pts, Nifty Tops 25K Amid GST Rationalisation, S&P Upgrade

The Indian equity market was riding high on a slew of tailwinds on August 18, propelling the benchmarks Sensex and Nifty 50 over 1% higher in trade today. Investor sentiment got a boost after Prime Minister Narendra Modi announced a ‘Diwali gift’ for the masses with a plan for next-generation GST reforms. That news, sitting on top of the latest sovereign credit rating upgrade by S&P Global Ratings and upbeat global cues following Putin-Trump talks, drove gains in the domestic markets.

“The landmark ratings upgrade after 18 years signals enhanced investor confidence and could trigger sustained foreign inflows into Indian markets. Meanwhile, next-generation GST reforms expected by Diwali will streamline tax structures and boost consumption-driven sectors significantly,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

In his Independence Day address on August 15, Prime Minister Modi teased that the government had circulated a draft of proposed GST changes to states, seeking cooperation to implement them before Diwali. Analysts expect most goods and services could move into the 5% and 18% slabs, benefiting sectors such as autos, cement, and insurance.

S&P Global Ratings raised India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-’, the first upgrade since 2007. The rating agency cited robust economic growth, improved policy credibility, and progress on fiscal consolidation.

“In addition, geopolitical developments, particularly potential ceasefire talks between Russia and Ukraine following Trump-Putin engagement, could reduce global risk-off sentiment,” Vakil added.

Also, global markets showcased an upbeat trend, further boosting sentiment for local equities. Japan’s Nikkei, China’s Shanghai Composite, and Hong Kong’s Hang Seng were also firm in the green while Wall Street futures pointed to a positive open.

Markets were further supported after US President Donald Trump remark that Washington may not impose secondary tariffs on countries continuing to purchase Russian crude, easing concerns about potential trade-related disruptions.

The total market capitalisation of all listed companies on the BSE swelled by ₹5.93 lakh crore, reaching ₹451.70 lakh crore.

Auto and consumer stocks led the gains on the benchmarks, jumping 3.4% and 1.8%, respectively, pinned on hopes of improved demand amidst GST rate cuts. Bajaj Auto, TVS Motor, Maruti Suzuki and Hero MotoCorp posted stellar gains and surged as much as 8% whereas shares of Voltas, Blue Star, PG Electroplast and Amber Enterprises also jumped close to 6%. Mid-cap and small-cap indices each added about 1%.

Financial stocks also rose, with the Nifty Bank index gaining over a percent on optimism following the S&P ratings upgrade of lenders including HDFC Bank and State Bank of India. HDFC Bank shares rose over 1%, while SBI gained 0.6%. Overall, 15 of the 16 major sectors glimmered in the green thus far, painting the broad-based participation in the market rally.

On the technical front, Shrikant Chouhan, Head Equity Research, Kotak Securities sees the 24,450 zone acting as a key support zone for short-term traders of the Nifty.” As long as the index trades above this level, the bullish sentiment is likely to continue. On the higher side, 24,800 would be the immediate resistance zone for the bulls,” Chouhan said.

Meanwhile, Chouhan also expects a successful breakout above 24,800 to push the index towards 24,900-25,000. Basis this, he charted an ideal strategy for traders, which should focus on reducing weak long positions between 24,900 and 25,000 (spot) levels. “For traders, our advice is to trail stop loss to 24,600 for holding positional long bets. A close above 25,000 would lift the market towards 25,250-25,300 levels, he believes.