Will Nifty Continue Its Surge Amid GST Reforms and Promising Earnings?

Mumbai, Sep 13 (NationPress) The Indian stock market experienced a significant bullish trend this week, fueled by optimism surrounding stronger earnings for H2 FY26, spurred by GST rationalization and the positive impacts of monetary easing.

The benchmark indices, Nifty and Sensex, wrapped up the week with gains of approximately 1.32 percent and 1.21 percent, respectively, largely driven by the performance of auto and IT stocks. Notably, midcap and smallcap stocks outperformed the broader market indices.

The IT index demonstrated a robust rally, propelled by renewed expectations of a Fed rate cut, Infosys’ recent buyback announcement, and growing optimism regarding a rebound in technology spending.

The Nifty surged by 373 points, forming a strong bullish candle. Analysts noted that the index has decisively broken out of a symmetrical triangle pattern on the weekly chart, indicating potential for further upward movement.

“The Nifty has exhibited resilience, maintaining a firm position above the 25,100 threshold, closing at 25,114. It continues to trade above its significant EMA levels, highlighting a broader bullish sentiment,” stated Choice equity broking. Immediate resistance levels are identified at 25,160, followed by 25,250 and 25,500 zones, while immediate support is anticipated at 25,000 and 24,900.

Contrasting with the IT sector, consumer-centric sectors like auto and FMCG advanced, buoyed by expectations that GST cuts will enhance domestic consumption and foster demand recovery, as per Vinod Nair, Head of Research at Geojit Investments Limited.

Domestic CPI inflation saw a slight increase, and ongoing foreign outflows pressured the rupee. Meanwhile, gold prices reached new highs due to heightened safe-haven demand amidst global trade uncertainties.

This week, US retail inflation climbed to 2.9 percent in August, marking the highest level since January. Core inflation, which excludes food and energy, remained steady at 3.1 percent. The market is focused on the slowdown in job growth and the likelihood of quicker Fed easing. The yield on the 10-year US Treasury note fell to 4 percent, the lowest since April.

Multiple analysts have warned the Fed against decreasing rates in light of persistently high inflation, yet they also acknowledge that the signs are evident. With the US CPI inflation data for August and a notable decline in labor market conditions, they predict a 25-basis-point cut at next week’s FOMC meeting and foresee approximately three cuts in total for 2025.

aar/na