The domestic stock market started the week with a gap-up, driven by optimism surrounding GST rationalisation
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MUMBAI — The domestic stock market started the week with a gap-up, driven by optimism surrounding GST rationalisation, analysts said on Saturday, adding that this week underscored India’s dual strategy of cushioning external headwinds while reinforcing domestic growth drivers.
Additionally, a sovereign rating upgrade by S&P added another layer of confidence among investors.
“However, the rally lost momentum toward the end of the week as investors turned cautious due to profit booking and external headwinds. A spike in the 10-year Indian government bond yield also raised concerns about the fiscal position in light of the GST reforms,” said Vinod Nair, Head of Research, Geojit Investments Ltd.
According to analysts, the market is awaiting clarity on whether the additional 25 per cent US tariffs on Indian goods, linked to the import of Russian oil, will be implemented next week.
In the US, stocks surged on Friday after Federal Reserve Chair Jerome Powell suggested a rate cut could be coming soon. The Dow made a new intra-day record, rising by more than 900 points.
According to Arsh Mogre, Economist, PL Capital, Indian policymakers advanced a $20 billion GST-driven consumption stimulus and enacted a modernised Income-tax Act to simplify compliance and lift household demand. These moves are expected to add 0.6 per cent to GDP.
The RBI reaffirmed its 4 per cent inflation target, signalling continuity in monetary policy despite volatile global conditions.
“With Q1 FY26 growth projected at 6.5–6.7 per cent, momentum remains solid, though near-term risks hinge on US monetary signals and trade frictions. Overall, India’s macro stance is defined by proactive fiscal support, policy credibility, and resilience against global uncertainty,” said Mogre.
On Friday, Sensex ended the session at 81,306.85, down 693.86 points or 0.85 per cent. Ending upward momentum, the 30-share index opened the session in negative territory at 81,951.48 against last session's closing of 82,000.71. The index further extended the losing momentum to hint intra-day low at 81,291.77 amid overall selling.
Nifty closed at 24,870.10, down 213.65 points or 0.85 per cent.
According to analysts, the consumption sector is likely to benefit from a favourable monsoon, low interest rates, and indirect tax reliefs.