Stock Market Dips After Initial Increase in GST Rates; Sensex Falls 500 Points from Peak Levels (live)

The Indian stock market has experienced a significant boost in recent days, with auto stocks leading the charge, followed closely by consumer goods and Fast-Moving Consumer Goods (FMCG). This surge can be attributed to the recent GST rate change announcement by the Union Finance Minister, Niramala Sitharaman.

In a move hailed as an early Diwali bonus, the government has revamped the goods and services tax (GST) rate structure, aiming to address consumer welfare and revenue efficiency. Hemant Jain, President at PHDCCI, praised the GST rate rationalisation as a landmark reform.

The proposed changes are expected to boost the GDP growth by 100 to 120 basis points over the next four to six quarters. This optimistic view is shared by economists and analysts, including Shripal Shal, CEO of Kotak Securities, and multiple sources in the Indian market news.

In response to the GST rate change announcement, the Nifty 50 and Sensex have risen more than 0.5% each. Meanwhile, the GST on agriculture products like tractors, tyres, irrigation systems, and farm machinery has been reduced to 5%.

Similarly, GST on daily essentials such as toiletries, packaged foods, and utensils will be reduced from 18-12% to 5%, easing household budgets and stimulating demand. The reduction in GST rates on automobiles, appliances, and electronics is expected to boost industry volumes and create jobs.

The proposed changes also see the Central government moving towards a two-slab GST structure from the current four. Items previously in the 28% slab will be moved to a new 40% slab, while most of the products and services attracting the 12% and 28% GST slabs will be shifted to the 5% and 18% slabs, respectively.

Meanwhile, Asian markets are trading higher following overnight gains on Wall Street. Japan's Nikkei 225 rose 0.57% in early trading, and the Topix index increased 0.41%. The US markets closed Wednesday's session on a higher note, boosted by a rally in tech stocks. The Nasdaq Composite gained 1.03%, the S&P 500 climbed 0.51%, but the Dow Jones Industrial Average lagged slightly.

Futures for Hong Kong's Hang Seng index stand at 25,332, slightly lower than its last close. However, the positive sentiment from the Indian stock market may potentially influence the Asian markets in the coming days.

It is important to note that no new facts related to BSE Sensex, Nifty Bank, NSE Nifty, or the GST council were mentioned in the paragraph. Nonetheless, the planned GST changes are expected to have a positive impact on the Indian economy, boosting GDP growth and stimulating various sectors.

Stock Market Dips After Initial Increase in GST Rates; Sensex Falls 500 Points from Peak Levels (live)