Indian stock market gains in volatile week amid GST reforms

Mumbai, Sep 6: The Indian equities ended marginally higher this week as initial optimism around GST rationalisation trickled down and global trade tensions resurfaced.

Benchmark indices Nifty and Sensex ended the week with a gain of around 0.85 per cent with the focus shifting to mid- and small-cap stocks.

The Nifty IT slipped over 2.5 per cent this week amid concerns of reduced discretionary spending, driven by economic uncertainty, elevated rates, and geopolitical risks. Sector-wise, Nifty Metal and Auto indices gained around 1 per cent each, while Realty and FMCG slipped up to 1.5 per cent on profit booking.

“In contrast to the IT sector, consumer-focused sectors such as auto and FMCG advanced, supported by expectations that GST cuts will boost domestic consumption and aid demand recovery,” said Vinod Nair, Head of Research, Geojit Investments Limited.

The upbeat macroeconomic data, hopes of a US Fed rate cut, and positive global cues lend some support to domestic equities. Global bond markets, however, added to the cautionary mood, with German and French 30-year yields hitting decade highs on rising debt and fiscal imbalances in the Eurozone.

Auto majors such as Eicher Motors and M&M rallied 2 per cent each to record highs after GST on vehicles was reduced from 28 per cent to 18 per cent.