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Key Points

Indian equities ended the week strongly with Nifty gaining 1.32%. The rally was driven by auto and IT stocks amid GST reform hopes. Analysts note the index broke a key pattern, signaling potential for further gains. Global factors like anticipated Fed easing also supported market sentiment.

Key Points: Nifty Gains 1.32% on GST Reform Hopes and Stronger H2 Earnings

  • Nifty broke out of a symmetrical triangle pattern signaling further upside potential
  • IT sector rallied on Infosys buyback and Fed cut hopes
  • Auto and FMCG stocks advanced on expected GST boost to consumption
  • Midcap and smallcap stocks outperformed the benchmark indices this week
2 min read

Nifty gains 1.32 pc this week on hopes of GST reforms, stronger earnings in H2

Nifty and Sensex surged over 1% this week driven by auto and IT stocks, fueled by GST rationalization hopes and optimism over Fed rate cuts.

"The Nifty has shown resilience by holding firmly above the 25,100 mark... underscoring the broader bullish undertone - Choice Equity Broking"

Mumbai, Sep 13

The Indian equities displayed strong bullish momentum this week on hopes of stronger H2 FY26 earnings, driven by GST rationalisation and the benefits of monetary easing.

Benchmark indices Nifty and Sensex ended the week with a gain of around 1.32 per cent and 1.21 per cent, respectively, with the rally driven by auto and IT stocks. Midcap and smallcap stocks outperformed the benchmark indices.

The IT index exhibited its rally, driven by renewed hopes of a Fed rate cut, Infosys’ buyback announcement, and optimism over a revival in technology spending.

The Nifty advanced 373 points forming a robust bullish candle. Analysts said that, on the weekly chart, the index has broken out of a symmetrical triangle pattern with conviction, signalling the potential for further upside.

"The Nifty has shown resilience by holding firmly above the 25,100 mark, closing at 25,114. It continues to trade above its key EMA levels—underscoring the broader bullish undertone," according to Choice equity broking. Immediate resistance levels are placed at 25,160, followed by 25,250 and 25,500 zones. Immediate support is seen at 25,000 and then at 24,900 zones.

In contrast to the IT sector, consumer-focused sectors such as auto and FMCG advanced, supported by expectations that GST cuts will boost domestic consumption and aid demand recovery, said Vinod Nair, Head of Research, Geojit Investments Limited.

Domestic CPI inflation registered a slight uptick and continued foreign outflows weighed on the rupee. Gold reached fresh highs on strong safe-haven demand amid global trade tensions.

This week, US retail inflation rose to 2.9 per cent in August, marking the highest rate since January. Core inflation, excluding food and energy, held steady at 3.1 per cent. The market focused on the slowdown in job gains and the potential for accelerated Fed easing. The yield on the 10-year US Treasury note dropped to 4 per cent, marking the lowest level since April.

Several analysts have cautioned the Fed against lowering rates amid persistent high inflation but indicated that the writing on the wall is clear. With United States' CPI inflation in August, along with a sharp downturn in labour market dynamics led they anticipated a 25-basis-point cut at next week’s FOMC meeting and expect approximately three cuts in total for 2025.

—IANS

- IANS

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Reader Comments

P
Priya S
Midcap and smallcap outperforming is the real story here. Retail investors who stayed invested in quality smallcaps are finally getting rewarded. Hope this momentum continues!
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Sarah B
While the gains are encouraging, we shouldn't ignore the foreign outflows and rupee pressure. The Fed rate cut expectations are driving global markets, but domestic fundamentals need to strengthen too.
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Vikram M
Infosys buyback announcement came at the right time! IT sector was due for a bounce back. Fed rate cuts will definitely help Indian IT companies with their US business. Good times ahead for tech investors.
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Ananya R
GST reforms have been long overdue. If the government actually delivers on rationalization, it could be a game-changer for consumer sectors. Auto and FMCG stocks reacting positively shows market confidence in this move.
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Michael C
The symmetrical triangle breakout on Nifty is technically very significant. Resistance at 25,160 and support at 25,000 gives clear levels to watch. Market seems poised for further upside if global cues remain supportive.

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