Benchmark indices surged up to 1.6% in intraday trade on Monday, reacting positively to Prime Minister Narendra Modi’s Goods and Services Tax (GST) reform proposals announced on Friday. Investor sentiment was further boosted by S&P Global Ratings’ upgrade of India’s sovereign credit rating.
After opening 700 points higher, the Sensex jumped 1,168.11 points, or 1.45%, to hit an intraday high of 81,765.77 as investors bet that lower GST rates would revive consumer demand and improve corporate earnings. However, profit booking at higher levels pared some gains, and the index finally closed at 81,273.75, up 676.09 points, or 0.84%.
The Nifty surged 390.70 points, or 1.59%, to breach the 25,000 mark, hitting an intraday high of 25,022, before settling at 24,876.95, gaining 245.65 points, or 1%. The rally was led by automobiles and consumer durables.
Midcaps, Smallcaps outperform
Outperforming the benchmarks, the broader BSE Midcap and BSE Smallcap indices advanced 1% and 1.39%, respectively. Market breadth was positive, with 2,562 gainers against 1,627 losers on the BSE.
Investors’ wealth rose by ₹6.17 lakh crore — the biggest single-day addition in three months.
Domestic institutional investors continued their buying spree, purchasing shares worth ₹4,103.81 crore, while foreign portfolio investors were also net buyers to the tune of ₹550.85 crore, according to provisional BSE data.
“The positive sentiment was driven by GST reform proposals, easing concerns over crude oil prices, and a sovereign rating upgrade, which together lifted investor confidence,” said Ajit Mishra, SVP–Research, Religare Broking.
Mishra added that the rebound reflects renewed optimism supported by policy tailwinds and improving technical indicators. However, he cautioned that lingering global uncertainties, particularly around the India–US trade talks amid a possible delay in their meeting, could still weigh on sentiment.
“The proposed rationalisation of GST is a sentiment booster for the domestic market. Additionally, the recent conclusion of the US–Russia summit without any escalation in geopolitical tensions has helped ease investor anxiety,” said Vinod Nair, Head of Research, Geojit Investments.
He added that the automobile sector is expected to be a key beneficiary of the anticipated tax reforms and that consumption-led sectors could gain traction in H2FY26 on the back of a demand revival.
Autos, durables lead sectoral rally
Sector-wise, automobiles and consumer durables were the top performers, gaining 4.26% and 3.08%, respectively. Consumer discretionary, realty, commodities, and metals also advanced over 2% each. On the flip side, IT, power, and TECK were the only sectors to close in the red.
Maruti Suzuki led the Sensex gainers with a 9% rally, followed by Bajaj Finance, UltraTech Cement, Bajaj Finserv, and M&M, which gained up to 5.02%