The Indian share market sees green trends up today on account of sharp surprises in some stocks and a positive trend in the auto industry. The Nifty 50 jumps more than 50 points in early trade, with the Sensex adding almost 250 points before some profit taking brought partial correction during the day. However, major sectors like automobiles and FMCG continued to show strong momentum, indicating upbeat market optimism.
Uptrend in Auto Sector
The auto segment emerged as a significant gainer of the rationalisation of GST as the tax slabs were reduced and streamlined for small cars and two-wheelers, boosting demand by consumers in advance of the festival season. The Nifty Auto index had every component stock trading in the green, supported by robust sales figures- Maruti Suzuki, Bajaj Auto, and Royal Enfield saw impressive gains, the latter recording an impressive 55% year-over-year increase in sales. This uptick in demand and investor confidence enhanced the overall sector’s prospects, solidifying the auto sector as a major growth driver for the overall market rally.
Major Surprises in Stocks
Mahindra & Mahindra was the top performer on the day, spiking over 7.5% to a new record high, indicating robust optimism in the firm’s growth story in the large-cap auto space. The stock’s successive gains and trading above key moving averages indicated a strong uptrend. Bajaj Finance and Bajaj Finserv also ranked among the top Nifty gainers, as did Eicher Motors and Nestle India. Conversely, certain heavyweight stocks such as Coal India, Tata Steel, Hindalco, Reliance Industries, and Zomato fell, adding to the sector’s mixed breadth.
Market Outlook and Sectoral Impact
Stocks cheered the GST overhaul, reducing the number of slabs in the tax rate regime to four: 0%, 5%, 18%, and an additional 40% slab for luxury and sin items, reducing the cost of essentials and improving consumption potential. This will drive growth in consumption-oriented industries like automobiles, FMCG, and consumer durables at a faster rate, and could lead to a virtuous cycle of economic growth and corporate profit rise. In spite of some profit taking and continuous foreign institutional investor selling pressure, the domestic market’s resilience was seen with coverage by domestic institutional investors. Experts opine that holding above nearest support levels may bring in more upside traction for the Nifty towards psychological resistance at 25,000 levels.
Nutshell
In summary, India’s stock market reveals sector-specific rallies of strength that pleased investors in a positive manner, spearheaded by the auto segment’s euphoric trend driven by GST reforms and healthy demand metrics. This day’s performance is evidence of enduring optimism in the presence of continuing reforms, placing the market in a good position as it weathers domestic and international leads in the near term.
