Why Is Stock Market Rising Today? Indian benchmark indices Sensex and Nifty traded higher on Thursday as investors cheered the government’s sweeping Goods and Services Tax (GST) overhaul, which slashed
levies across a wide range of goods to spur consumption ahead of the festive season. Gains were also underpinned by global cues, including a softer US dollar and expectations of a Federal Reserve rate cut.
The NSE Nifty climbed 200 points, or 0.80%, to trade above 24,900, while the BSE Sensex advanced over 700 points, or 0.89%, to cross 81,200.
The combined market capitalization of all BSE-listed companies rose by Rs 1.70 lakh crore to Rs 454.99 lakh crore.
Here are the five key factors driving today’s rally:
1. GST overhaul
Finance Minister Nirmala Sitharaman on Wednesday announced sweeping GST cuts across hundreds of goods—from soaps and personal care to automobiles—in a bid to revive demand and cushion the economy from steep U.S. tariffs.
The 56th GST Council meeting collapsed the earlier four-tier structure into two rates—5% and 18%—while retaining a 40% “sin tax” on tobacco, pan masala and luxury items. The new structure, dubbed “GST 2.0,” will come into force on September 22. The Council also extended the compensation cess till October 31 and ruled out reconvening on Thursday.
Analysts hailed the move as consumption-friendly. Dr. V.K. Vijayakumar, chief investment strategist at Geojit Investments, called it “revolutionary,” saying it would spur demand, lift corporate earnings, and ultimately benefit consumers with lower prices. He added that autos, FMCG, cement, insurance and white goods could see strong momentum, though U.S. tariff issues may linger.
2. Auto Stocks In Fast Lane
Auto shares outperformed, with the Nifty Auto index surging nearly 4% after the Council cut GST from 28% to 18% across most vehicles. The new rates, effective September 22, cover petrol, hybrid, LPG and CNG cars up to 1200cc (length under 4000 mm), diesel cars up to 1500cc (length under 4000 mm), motorcycles up to 350cc, three-wheelers and goods transport vehicles.
A uniform 18% GST was also introduced on auto parts, simplifying the tax framework. Kotak Securities’ Arun Agarwal noted the cuts met industry expectations, with on-road prices likely to fall by mid-to-high single digits for two-wheelers (<350cc), three-wheelers, CVs and tractors, and by low-to-high single digits for passenger vehicles.
Shares of Mahindra & Mahindra jumped 7.8%, Eicher Motors rose 5.4%, while Tata Motors, Bajaj Auto and TVS Motors added between 1% and 3%.
3. Weaker Dollar
The U.S. dollar weakened as data showed job openings fell to a 10-month low in July, raising bets on a Fed rate cut later this month. CME’s FedWatch tool now assigns a 97% probability of a cut, up from 89% a week ago.
The dollar index slipped to 98.21, which may ease pressure on the rupee, currently hovering near record lows.
4. Global Markets Strengthen
Indian equities mirrored gains across Asian peers, though markets turned choppy later. MSCI’s Asia-Pacific index (ex-Japan) slipped 0.2% as China’s Shanghai Composite dropped 1.6% on reports of fresh regulatory curbs.
In the U.S., stock futures edged higher after a dovish Fed tone and weaker labor data boosted hopes of easing. Overnight, Wall Street had ended mixed, with the Nasdaq and S&P 500 rising while the Dow closed slightly lower.
5. Technicals Point To More Upside
Technical analysts said Thursday’s breakout improves the near-term outlook. Anand James, chief market strategist at Geojit Investments, pegged 24,809 as the immediate Nifty target, with 25,025–25,100 as the next band, while keeping 24,650 as the pivot support.
