The GST Council’s move to simplify tax rates and lower levies on essentials pushed the Nifty past 24,700. Autos and FMCG stocks led the charge, with investors betting that lower GST will boost consumption. Nifty Metal and Nifty Auto indices each gained more than 5% during the week.
Yet, the optimism proved short-lived. IT stocks came under sharp pressure, hit by concerns over weak global demand and cutbacks in discretionary tech spending. Global jitters added to the mix, with bond yields in Europe touching decade highs and foreign investors continuing to pull money out of Indian equities. The rupee slipped to a record low against the dollar, and safe-haven buying pushed gold prices to new peaks.
For the week, the Nifty managed a gain of 200 points, but the mood was subdued compared to the sharp rally that many had hoped GST 2.0 would unleash.
What analysts are saying
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said the GST reforms have laid the foundation for growth, even if the impact will take time to show.“The biggest news was the GST rationalisation, which triggered strong buying in mid- and small-caps. Despite global headwinds, the Nifty managed to hold up. A move above 25,000 could open the way to 25,250, while 24,350 remains key support.”Ross Maxwell, Global Strategy Lead at VT Markets, highlighted India’s relative underperformance versus Asian peers.
“Foreign investors have been heavy sellers this year, shifting to cheaper markets like Taiwan, South Korea, and China. High US tariffs on Indian goods are another headwind. While GDP growth is strong, corporate earnings momentum is weak, and high valuations make India less attractive in the short term.”
The road ahead
This week, investors will be watching both domestic and global signals. On the domestic side, the GST cuts and government spending are expected to support consumption-driven sectors. Autos, FMCG, and other growth-linked industries may continue to benefit. However, weak urban demand and cautious corporate sentiment remain concerns.
Globally, the spotlight will be on U.S. economic data. The upcoming jobs report and inflation readings could shape expectations for a Fed rate cut, a move that would provide relief to emerging markets like India. The European Central Bank’s policy stance will also be closely tracked.
Technically, Nifty is trying to form a base in the 24,500–24,350 zone, but faces resistance near 25,000. A breakout could trigger fresh momentum, while a fall below 24,350 may drag the index to 24,100. For the Bank Nifty, reclaiming 55,000 is key to pushing higher.
Analysts say the GST 2.0 hype may not have delivered fireworks, but the story isn’t over yet. Domestic policy support, resilient consumption, and easing global rates could still set the stage for a stronger rally.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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