The Indian stock market witnessed a strong rebound this week, driven by optimism around the proposed GST 2.0 reforms and positive global signals. Both the Nifty 50 and Sensex gained momentum, while certain sectors like auto, metals, and real estate stood out as top performers. However, continued foreign investor outflows and weakness in the banking sector kept overall sentiment cautious.

Market Performance Overview

· Nifty 50 gained 1.29%, closing at 24,741.

· Sensex advanced 1.13%, ending the week near 80,710.

· Mid-cap and small-cap stocks outperformed, reflecting broader market strength.

This rally comes after a brief period of consolidation, showing resilience in domestic equities despite global uncertainties.

Key Drivers of the Market

1. GST 2.0 Reforms Boost Sentiment

The government’s announcement on simplifying GST rates triggered a positive wave across sectors. Expectations of lower tax complexities and improved business efficiency lifted investor confidence. Stocks in FMCG, real estate, and consumer durables saw strong buying interest.

2. Global Cues and U.S. Rate-Cut Hopes

Global markets supported Indian equities, with growing expectations of a U.S. Federal Reserve rate cut. This development could increase capital flows into emerging markets like India, making domestic stocks more attractive to investors.

3. Sectoral Trends

· Auto, metals, and real estate led the rally, showing robust demand and investor interest.

· FMCG stocks gained on the back of GST optimism.

Bank Nifty remained a laggard, capping broader gains and signaling the need for a revival in financial stocks.

4. Earnings Recovery in Focus

Market analysts, including Mayuresh Joshi, believe the sustainability of this momentum depends heavily on corporate earnings recovery. Positive earnings could drive the next leg of the rally.

5. Foreign vs. Domestic Flows

Foreign Portfolio Investors (FPIs) remained net sellers this week, creating short-term pressure.

Domestic Institutional Investors (DIIs) continued to support the market, reflecting strong local confidence.
Kotak AMC’s Nilesh Shah emphasized focusing on “growth and governance” to weather FPI-driven volatility.

Outlook for Next Week

Looking ahead, market momentum will depend on:

· Final updates on GST 2.0 reforms.

· Global interest rate developments and foreign investor flows.

· The performance of banking and IT sectors, which need to revive for a stronger uptrend.

· Upcoming corporate earnings announcements in September.

Conclusion

This week’s performance highlights India’s ability to bounce back amid global uncertainties. While GST reforms and U.S. policy cues are driving optimism, investors should stay cautious of FPI outflows and sector-specific weaknesses. For long-term investors, sectors like auto, metals, and real estate appear promising, but attention must remain on earnings growth and governance.

🔔 Disclaimer: This content is for informational purposes only and should not be taken as investment advice. Stock market investments are subject to market risks. Please consult your financial advisor before investing.

✍️ Published by Luster Capital – your partner in stock market research, mutual fund distribution, and financial planning.

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