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GST reforms rationalized tax slabs to 5% and 18%, lowering costs on consumer goods and autos.
Sensex surged 370 points to 80,938 and Nifty gained 102 points to 24,817.
Auto and FMCG sectors rallied strongly, while IT stocks faced global demand concerns.
The Indian stock markets witnessed significant gains on September 4, 2025, with benchmark indices surging following the implementation of sweeping GST reforms that promise to boost consumer spending during the upcoming festive season. Nifty 50 traded at 24,817.40, gaining 102.35 points or 0.41% at press time. Meanwhile, Sensex finished at 80,938.12, up 370.41 points or 0.46%. Let’s explore the current stock performance in detail based on Moneycontrol live market data.
Despite experiencing some profit-booking, major indices maintained their upward momentum throughout the trading session. Banking stocks showed resilience with Nifty Bank index advancing 133.20 points to 54,200.75, representing a 0.25% gain. However, the IT sector faced pressure, with Nifty IT declining 227.20 points or 0.64% to 35,247.75. Thus, reflecting ongoing concerns about global demand for technology.
Mahindra & Mahindra emerged as the standout performer among top gainers on Nifty 50, surging 6.34% to Rs. 3,494.30 and hitting a record high. The auto giant was accompanied by other strong performers, including Bajaj Finance share price, which rallied 4.99% to Rs 941. Similarly, Trent advanced 2.45% to Rs. 5,613.50.
On the losing side, TATA Consumer Products declined 2.40% to Rs 1,077.90. At the same time, ONGC and IndusInd Bank faced selling pressure, dropping 0.93% and 0.92% respectively.
The market euphoria was largely driven by the GST Council's decision to rationalize tax rates into two primary slabs of 5% and 18%, effective September 22. This restructuring is expected to make hundreds of consumer items more affordable, from everyday essentials like soaps to big-ticket purchases like automobiles.
Food companies particularly benefited from the reforms. Prataap Snacks jumped over 3%, while Bikaji Foods and Gopal Snacks gained approximately 2% each after the GST rate on namkeen items was reduced from 12% to 5%. Analysts believe this could boost demand in the FMCG sector during the festive season.
Conversely, Delta Corp plummeted nearly 7% following the GST Council's decision to increase taxes on casino admissions from 28% to 40%, directly impacting the gaming company's revenue prospects.
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The auto sector was a major highlight, with Nifty Auto index surging over 2.50% as investors anticipated increased vehicle demand due to lower GST rates. Construction-related stocks also gained traction following the reduction in cement GST from 28% to 18%, which is expected to reduce infrastructure costs significantly.
FMCG stocks remained in focus as the tax cuts on essential items are likely to boost rural and urban consumption patterns. The broader market showed mixed signals, with midcap and smallcap indices experiencing volatility but eventually closing with marginal gains.
Solar Industries shares faced a challenging day, declining 2.68% to Rs 13,910.45. The fall followed a tragic explosion at its Nagpur facility that resulted in one fatality and eight injuries, as reported by The Times of India. The incident occurred during the crystallization process of energetic materials, raising safety concerns among investors.
On a positive note, SpiceJet announced an interline agreement with Gulf Air as per a report by The Economic Times. Hence, enhancing connectivity between India and the Middle East. However, the stock marginally declined 0.28% to Rs 35.70 amid mixed market sentiment.
Foreign Institutional Investors (FIIs) continued their selling spree, offloading stocks worth Rs. 1,666.46 crore on September 3. On the other hand, Domestic Institutional Investors (DIIs) provided support by purchasing Rs. 2,495.33 crore worth of equities, maintaining the market's overall stability.
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The Indian stock market is set for a consumption-driven rally as GST reforms align with the festive season and infrastructure demand. Lower tax rates on autos, FMCG, and cement are expected to boost spending, while strong DII inflows continue to offset persistent FII selling. Analysts foresee sustained momentum, though global tech weakness and sectoral volatility may temper gains.
Indian stock markets witnessed strong gains on September 4, 2025. Sensex rose 370 points to close at 80,938, while Nifty 50 advanced 102 points to 24,817. Positive momentum came mainly from auto and FMCG stocks, driven by GST reforms. Banking stocks also showed resilience, while IT shares faced selling pressure due to global concerns about technology demand. Overall, investors displayed optimism ahead of the festive season as tax rationalization is expected to spur consumption.
The rally in Sensex and Nifty was largely fueled by the GST Council’s decision to restructure tax rates into two slabs of 5% and 18%, effective September 22. This change made several consumer items more affordable, including food products and automobiles. Investors expected this to drive consumption ahead of the festive season. Additionally, strong performances from Mahindra & Mahindra, Bajaj Finance, and Trent supported index gains.
The auto and FMCG sectors gained the most from GST reforms. The Nifty Auto index surged over 2.50% as lower GST rates on vehicles boosted demand expectations. FMCG stocks also rallied after the tax on namkeen products was cut from 12% to 5%, benefiting companies like Prataap Snacks and Bikaji Foods. Cement stocks rose as GST dropped from 28% to 18%, lowering construction costs. Together, these sectoral moves reinforced investor confidence in a consumption-led recovery in India’s stock market.
Mahindra & Mahindra was the top gainer, rallying 6.34% to Rs 3,494.30 and hitting a record high. Bajaj Finance followed with nearly a 5% surge, while Trent added 2.45%. On the downside, Tata Consumer Products declined 2.40%, ONGC slipped 0.93%, and IndusInd Bank fell 0.92%. Sectoral movers showed strong divergence, with auto and FMCG driving gains while IT stocks pulled back. These movements reflected how GST reforms lifted consumption-driven stocks but weighed on sectors with external demand challenges.
The outlook for the Indian stock market appears optimistic following GST reforms. With tax cuts aligned to the festive season, analysts expect a surge in consumption-led demand across automobiles, FMCG, and construction. This is likely to support continued market growth in the coming months. However, risks remain, including global technology demand weakness and persistent FII selling. Domestic institutional investors are expected to balance foreign outflows, but careful risk management is essential as volatility may persist despite positive reform-driven sentiment.
