SENSEX Rallies more than 700 points, Nifty tops 24,900; GST Cuts, 4 other drivers behind today’s rally

Indian Benchmark -Indices Sesex and Nifty traded higher on Thursday after the government had put taxes on a series of goods in a revision of goods and services (GST), aimed at stimulating consumption prior to the festive season and compensating for steep American rates, among other things.

The NSE Nifty achieved 200 points, or 0.80%, to act above the level of 24,900, while the BSE Sensex was more than 700 points, or 0.89%, above 81,200 marks.

The combined market capitalization of all companies on the BSE Rose with RS 1.70 Lakh Crore to RS 454.99 Lakh Crore.

Here are the five important factors that float today:

1. GST revision

Finance Minister Nirmala Sitharaman announced radical tax reductions on hundreds of consumer goods, from soap to small cars on Wednesday, in an attempt to stimulate demand and to dampen the economy at the resistance of steep American rates.

The move, part of the 56th meeting of the Council Goods and Services Tax (GST), collapsed the structure with four levels in a simplified second -line system of 5% and 18%, while retaining a special levy of 40% on tobacco, pan masala and other luxury goods. The restructured rates, branded as “GST 2.0”, will take effect on September 22. The Council also extended the compensation limitation until 31 October and confirmed that it would not reclaim on Thursday. Analysters say that the reform is ready to increase consumption and business income between sectors. Dr. VK Vijayakumar, main investment strategist at Geojit Investments, called it a “revolutionary” step that exceeded expectations, in favor of a broad spectrum of industries. Vijayakumar said that “the ultimate beneficiary is the Indian consumer who will benefit from lower prices”, and that the potential boost for consumption “perhaps in the field of the upward forbids”. Vijayakumar noted that the changes, in combination with earlier tax and monetary stimulus, can create a virtuous cycle, a virtuous growth to 6.5% in FY26 and possibly 7% in FY27, in Corporate Turnes.

“Stocks in sectors as varied as cars, FMCG, white goods, cement, insurance, etc. will be the focus of the attention of the bulls,” he said, adding that cars can surpass in the short term as short coverage of fuels. Nevertheless, Vijayakumar warned that “after the first enthusiasm the tariff issues will continue to chase the market.”

2. Car shares rally

Auto shares lead the profit on the day, with the Nifty Auto Index climbing nearly 4% after the GST council has approved a major reduction in tax rates in important segments of the car industry. The new rates, effective septeber 22, 2025, will reduce GST from 28% to 18% on a wide range of vehicles.

Among the categories that benefit are gasoline, gasoline hybrid, LPG and CNG cars with engines up to 1200 cc and length under 4000 mm, which will now attract an 18% tax. Diesel and Diesel-Hybrid cars up to 1500 cc and less than 4000 mm long also go to the lower bracket. Tricycles, motorcycles up to 350 cc and vehicles for freight transport will also move to the 18% plate.

In addition, the Council introduced a uniform 18% GST on all car parts, so that the tax structure is streamlined and classification peels are removed. The restructuring, part of a broader revision that has deleted the 12% and 28% plates, is aimed at increasing affordability and supporting consumption, because the economy is looking for new Momentum.

Arun Agarwal, vice-president of fundamental research at Kotak Securities, said that the tax changes largely meet the expectations of the industry, and notes that the tariff reduction of two-wheelers above 350 cc excludes 5%.

“Based on a complete pass-through, the price reduction on the road for two-wheelers (<350 cc), tricycle, commercial vehicles and tractors can be in the range from middle to high one digit," said Agrarwal. For passenger vehicles, the reduction would be "low to high single -digit number, depending on models."

Agarwal said that lower prices should help the mass market segments to see a stronger demand repair, while “auto components players with higher domestic exposure will benefit from a stronger OEM question.” Export -oriented suppliers, he said, will probably win less.

Mahindra and Mahindra jumped 7.8% to RS 3,539.25, while Eicher Motors climbed 5.4%. Tata Motors, TVS Motors and Bajaj car won between 1% and 3%.

3. Softer dollars

The US dollar weakened on Thursday as signs of a cooling labor market strengthened the expectations that the Federal Reserve will lower the interest rates this month.

From data released on Wednesday, we showed that vacancies in July fell to a low point of 10 months, which suggested that the mitigating demand for employees remained relatively modest even then. Because the Fed is closely monitoring, investors are waiting for Friday’s job report on further direction on the rate views.

The money markets now praise in a probability of 97% of a rate reduction during the emerging meeting of the FED, an increase of 89% a week ago, according to CME’s Fedwatch tool, per Reuters. Traders also see 139 base points of relaxation towards the end of next year.

The Dollar Index, which follows the Greenback against six large colleagues, traded at 98.21. It is expected that a wide weaker dollar will illuminate the pressure on the rupee, which has been traded just above its low point.

4. Strengthen global markets

Indian shares also followed wider movements about Asian colleagues, where shares were higher on Thursday before they yielded winnings when investors weighed Dovish signals of the Federal Reserve against renewed concerns about the Chinese markets.

The widest index of MSCI from Asia-Pacific shares outside of Japan fell 0.2% after early strength, drawn with a fall of 1.6% in the Shanghai composite. Chinese shares losing a third day after a Bloomberg news report that regulators are preparing measures to cool the market.

US stock futures rose by 0.1%, stimulated by the expectations of a FED rate reduction later this month after officials had hit a DOVISH TOON and the labor market data weaker than prediction. The latest Jolts report showed that vacancies fell to a low point of 10 months, the reinforcement of betting on relaxing.

5. Technical shares signal more upside down

Technical analysts said that the Thursday meeting opened space for further profit in the Nifty, although important resistance levels remain in the game.

Anand James, main market strategist at Geojit Investments, said that the move over 24,670 has shifted the bias in the short term. James sees 24,809 as the direct target, with 25,025-25.100 as the more optimistic objective, while 24,650 for the day keeps the most important pivot level.

Amruta Shinde, technical and derivatives analyst at Choice Equity Broking, noted that the index formed a bullish candle on the daily map, “suggests support at lower levels.” She immediately supported 24,600, with stronger support nearly 24,500. Moreover, resistance is expected at 24,850, followed by a large obstacle at 25,000. “A decisive outbreak above these levels could cause a new buying momentum,” she said, adding that the overall trend remains constructive as long as the index applies above its support zones.

Shinde advised investors to make partial profit on rallies and to keep a tight stop loss behind to manage the risk. Fresh long positions, Shind said, should only be considered if the Nifty remains above 24,850.