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Indian stock market is ready to start the week on a positive note, fueled by optimism from domestic tax reform and expectations of some monetary easing in the US. Gift Nifty futures were trading 0.23% higher at 24,882.50 points, signaling a positive opening for the benchmark Nifty 50, which had ended Friday’s session at 24,741 points.
Investor sentiment has been uplifted by the GST Council’s decision to reduce taxes on everyday essentials, a move aimed at stimulating household consumption and providing relief to sectors linked to discretionary spending.
The Nifty 50 gained 1.3% last week, while the Sensex advanced 1.1% as broader optimism took hold, especially in growth-driven sectors such as auto, consumer, and energy stocks.
Analysts believe that continued momentum in consumption, backed by government spending and tax rationalisation, will underpin the medium-term outlook for domestic equities.
Broader Asian markets also opened on a firm footing. The MSCI Asia ex-Japan index climbed 0.4%, after US labor market data showed only modest job additions in August. With payrolls missing forecasts and unemployment at 4.3%, there have been strengthened bets on a 25 bps Fed rate cut on September 17. Some investors even see scope for a 50 bps move if inflation allows.
For India, an easier US policy could mean stronger fund inflows and better liquidity, supporting market sentiment.
Commenting on the developments, market expert Ajay Bagga said, “The subdued US jobs report makes a rate cut by the Fed this month almost certain. Calls for a jumbo cut of 50 basis points are gaining traction.”
He also pointed out broader geopolitical and regional developments impacting sentiment. Japanese equities were firming up despite political upheaval, while US markets were digesting both immigration tensions and trade-related concerns.
Meanwhile, oil prices edged higher despite OPEC+ signaling an expansion in output.
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FIIs remained net sellers of Indian stocks for the tenth consecutive session on Friday, offloading equities worth Rs 1,327.24 crore. However, DIIs countered the selling, purchasing shares worth Rs 1,773.59 crore, extending their buying streak to nine straight sessions.
On Friday, the 30-share Sensex ended nearly flat at 80,710.76, slipping marginally by 7.25 points as gains in oil & gas and auto counters were offset by declines in IT and FMCG names.
With GST reforms boosting domestic confidence and global cues leaning dovish, Indian equity benchmarks are expected to open higher and potentially extend last week’s gains. Near-term market direction, however, will hinge on upcoming US inflation data and the Fed’s policy outcome, which could reshape global liquidity flows.
