SENSEX, NIFTY50 post best day in over two months on GST rate rejig hopes; m-cap surges by ₹5.39 lakh crore

The Indian equity benchmarks posted their best single-day performance in over two months as bulls got a boost from Prime Minister Narendra Modi's Independence Day speech.

The SENSEX rose as much as 1,168 points at the day's highest level and the NIFTY50 index touched an intraday high of 25,022 as weak sentiment with regards to tariffs on Dalal Street changed after PM Modi in his speech on Independence Day from the ramparts of Red Fort called for rationalisation of Goods and Services Tax (GST) regime.

The markets gave up some intraday gains in second half of the session, but benchmarks posted their best single day gains since at least June 6. The SENSEX rose 676 points or 0.84% to close at 81,274 and NIFTY50 index climbed 1% or 246 points to close at 24,877. With Monday's surge investors wealth, measured by market capitalisation, soared by ₹5.39 lakh crore, data from BSE showed.

Prime Minister Narendra Modi on Sunday clarified that the centre has circulated the draft of the next-generation GST reforms among states and sought their cooperation to implement the proposal before Diwali.

PM Modi had announced the proposal to reform the GST law in his Independence Day speech.

As per reports central government has proposed two tax rates of 5% and 18% in the revamped GST, which is likely to replace the current indirect tax regime by Diwali this year, highly placed sources told news agency Press Trust of India (PTI).

The centre has sent its proposal, which removes 12 and 28% slabs, to the panel of state finance ministers on GST rate rationalisation. They will now discuss it and place it before the GST Council. The council is expected to meet next month.

Meanwhile, buying was visible across the board as most of the major sector gauges compiled by the National Stock Exchange ended higher led by NIFTY Auto index's over 4% gain as the reduction in GST will be most beneficial for auto companies as currently automobiles attract highest tax rate of 28%. Shares of the country's largest car maker Maruti Suzuki surged over 9.2% to hit record high of ₹14,125 on the National Stock Exchange.

NIFTY Consumer Durables index surged over 3% as lower tax rate on white goods will be positive for consumer durable companies.

NIFTY Financial Services, FMCG, Metal, Realty and Private Bank indices also rose between 1%-2.2%.

On the flipside, select IT, media and pharma stocks faced selling pressure.

Broader markets also witnessed strong buying interest as NIFTY Midcap 100 index advanced 1.08% and NIFTY Smallcap 100 index climbed 1.38%.

NIFTY50 top gainers and losers

Maruti Suzuki was top gainer in the NIFTY50 index, the stock closed 9.19% higher at record high of ₹14,090 on hopes of reduced GST on cars which currently attract highest tax rate of 28%.

Hero MotoCorp, Nestle India, Bajaj Finance, Bajaj Auto and JSW Steel also rose between 3.7%-6%.

On the flipside, ITC, Eternal, Tech Mahindra, Larsen & Toubro, NTPC and Infosys were among the notable losers.

The overall market breadth was extremely positive as 2,562 shares ended higher while 1,627 closed lower on the BSE.