witnessed a dramatic reversal on Wednesday as benchmark indices surrendered most of their early gains despite the government announcing sweeping GST reforms.
The closed at 80,718.01, up just 150.30 points (0.19 per cent), while the settled at 24,734.30, gaining a modest 19.25 points (0.08 per cent) after retreating over 650 points from intraday highs.
The markets opened on a strong note with the Sensex hitting an intraday high of 81,456.67 and Nifty touching 24,980.75, driven by optimism surrounding to just two slabs of 5 per cent and 18 per cent. However, profit-booking at higher levels and mixed sector performances dragged the indices lower as the day progressed.
“The GST revamp was expected to streamline compliance and boost market sentiment, but it failed to excite Dalal Street as investors found limited immediate relief for businesses,” said Pranay Aggarwal, Director and CEO of Stoxkart. “While structural changes may improve efficiency in the long run, the absence of significant tax rate cuts or sector-specific incentives meant muted short-term impact.”
Among Nifty constituents, Mahindra & Mahindra emerged as the top gainer, surging 5.90 per cent to close at ₹3,480.00, followed by Bajaj Finance which gained 4.10 per cent to ₹933.05. Apollo Hospitals rose 2.00 per cent to ₹7,891.00, while Bajaj Finserv gained 1.88 per cent to ₹2,003.00 and Nestle India added 1.39 per cent to ₹1,211.40.
On the losing side, HDFC Life led the decline, falling 2.82 per cent to ₹754.55, followed by Tata Consumer Products which dropped 2.75 per cent to ₹1,074.00. IndusInd Bank declined 1.71 per cent to ₹755.00, Maruti Suzuki fell 1.65 per cent to ₹14,680.00, and Wipro also dropped 1.65 per cent to ₹245.45.
“Despite a buoyant start following global optimism and the GST Council’s move to rationalize tax slabs, the market could not sustain its momentum due to profit booking at higher levels and mixed sector performances,” noted Vaibhav Vidwani, Research Analyst at Bonanza. “The tax cuts were largely priced in since they were anticipated following hints on August 15.”
Sectoral performance remained mixed with Nifty Auto leading gains of 0.85 per cent, while FMCG rose 0.25 per cent, extending its rally for a fifth consecutive session as key beneficiaries of GST reforms. The Nifty Financial Services index gained 0.47 per cent to close at 25,853.40, while Nifty Bank managed marginal gains of 0.01 per cent at 54,075.45.
However, broader markets underperformed significantly with Nifty Midcap 100 declining 0.67 per cent to 56,959.15 and Nifty Next 50 falling 0.46 per cent to 67,151.55. Among 4,280 stocks traded on BSE, 2,325 declined while 1,809 advanced, with 146 remaining unchanged.
“Markets witnessed a volatile session and ended marginally higher, supported by sweeping GST reforms that signaled a structural tax overhaul,” said Ajit Mishra, SVP Research at Religare Broking. “The GST 2.0 reforms strengthen the case for a consumption-led recovery, with auto and consumer staples expected to benefit the most.”
The currency markets reflected the cautious sentiment as , down 0.07 per cent against the dollar. “Rupee traded weak as FII remained sellers while GST reform expectations provided limited support,” explained Jateen Trivedi, VP Research Analyst at LKP Securities. “Rupee is expected to trade in the range of 87.85 – 88.45.”
Commodity markets also witnessed pressure with gold trading weak by 0.55-0.60 per cent below $3,540 on COMEX and ₹1,06,500 on MCX. “After the recent strong rally, some retracement is being witnessed in the broader uptrend, keeping the bullish structure intact,” Trivedi added.
Technical analysts remained cautious about near-term prospects. “The daily close was just below the 21 EMA, indicating a continuation of weakness, although the index appears to be nearing a potential trend reversal,” said Rupak De, Senior Technical Analyst at LKP Securities. “A decisive move above 24,750 could provide the strength needed for the Nifty to move towards 25,000.”
Sudeep Shah, Head of Technical Research at SBI Securities, highlighted that “the zone of 24630-24600 will act as immediate support for the index. If the index slips below the 24600 level, then the next crucial support is placed at the 24450 level.”
Market participants also remained concerned about global trade uncertainties. “Given that the US is India’s largest export destination, accounting for 2.2 per cent of the GDP, the repercussions are inevitable,” noted Vinod Nair, Head of Research at Geojit Investments. “However, the GST rate cut is expected to significantly boost domestic consumption demand, countering the adverse effects of diminished export competitiveness.”
Looking ahead, analysts expect continued consolidation with stock-specific actions likely to dominate. “We expect the index to consolidate in the range of 24,400-25,000 amid stock specific actions,” said market commentary from Bajaj Broking. With key US employment data due Friday and ongoing concerns over trade policies, market participants are likely to remain cautious in the near term while watching for sustained moves above key resistance levels to confirm any meaningful trend reversal.