18 August, 2025: Indian Stock Markets Open the Week with a Green Bang

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The Indian stock markets surged this Monday as investors reacted positively to the government’s announcement regarding the rationalisation of the Goods and Services Tax (GST) rates. Prime Minister Narendra Modi’s declaration of next-generation GST reforms by Diwali 2025 boosted market sentiment, driving significant gains across key indices.

Key Indices Performance

The BSE Sensex rose 676.09 points (0.83%) to 81,274, and the NSE Nifty 50 increased by 245.65 points (0.99%), to close at 24,876.95. Broad indices reflected the same optimism, with the Nifty MidCap and SmallCap indices rising more than 1% each.

Impact of GST Rate Rationalisation

Reports indicate that the government plans to consolidate the existing four slabs of GST into two major slabs- 5% and 18%, and transfer most items in the 12% slab to 5%, while around 90% of those in the 28% slab will move to 18%. The reform is likely to cut consumer expenses, boost spending, and encourage growth in industries such as autos, cement, and consumer durables. It is expected that these changes may lead to strong consumption stimulus and top-line growth, triggering brokerages to revise upwards market targets.

Also Read | Goods in 28% GST to be mostly slashed to 18% slab, Reports suggest

The auto, FMCG, real estate, consumer durables, and insurance sectors performed better, echoing expectations that commodities already subject to a higher GST will get relief under the new structure. The Nifty Auto index surged more than 4.5%, Consumer Durables improved by 3.5%, and Realty increased 2.5%. Shares of companies making ACs, TVs, among other consumer goods, were in demand, with Voltas, Blue Star, PG Electroplast, and Amber Enterprises rising up to 10% as market players expected a reduced GST rate.

Also Read | Stock Recommendations after PM Modi’s Independence Day Speech

Auto shares witnessed remarkable gains with Maruti Suzuki and Ashok Leyland reaching new peaks. FMCG leaders such as Dabur, Hindustan Unilever, and Nestle too made notable gains, banking on the hopes of GST reforms. 

IT and pharma stocks trailed behind as investors switched into sectors that are seen to gain the maximum from the tax reforms.

Market Outlook

The contemplated GST rationalisation, along with a sovereign rating upgrade of India by S&P Global, has filled the markets with optimism. Though most sectors performed better and investor wealth increased significantly, market observers will keep a close eye on news related to GST rollout and economic numbers in the weeks ahead.