MUMBAI– The domestic stock market opened the week on a strong note, buoyed by optimism over Goods and Services Tax (GST) rationalisation, before losing steam toward the close as profit booking and global headwinds took hold, analysts said Saturday.
Investor sentiment was further boosted by a sovereign rating upgrade from S&P, which added confidence to the rally. But concerns mounted as the 10-year government bond yield spiked, raising questions about India’s fiscal position in light of GST reforms.
“The rally lost momentum toward the end of the week as investors turned cautious due to profit booking and external headwinds. A spike in the 10-year Indian government bond yield also raised concerns about the fiscal position in light of the GST reforms,” said Vinod Nair, Head of Research at Geojit Investments Ltd.
Analysts noted that markets are also awaiting clarity on whether the United States will impose an additional 25 per cent tariff on Indian goods next week, tied to New Delhi’s continued oil imports from Russia.
Globally, U.S. markets surged Friday after Federal Reserve Chair Jerome Powell signaled a possible rate cut, with the Dow hitting a new intra-day high, climbing more than 900 points.
Back home, Indian policymakers advanced a $20 billion GST-linked consumption stimulus and introduced a modernised Income-tax Act aimed at easing compliance and boosting household demand, said Arsh Mogre, Economist at PL Capital. He estimated the measures could add 0.6 per cent to GDP. The Reserve Bank of India reaffirmed its 4 per cent inflation target, signaling policy stability despite global volatility.
“With Q1 FY26 growth projected at 6.5–6.7 per cent, momentum remains solid, though near-term risks hinge on US monetary signals and trade frictions. Overall, India’s macro stance is defined by proactive fiscal support, policy credibility, and resilience against global uncertainty,” Mogre said.
On Friday, the Sensex closed at 81,306.85, down 693.86 points or 0.85 per cent, ending the week’s upward momentum. The 30-share index opened lower at 81,951.48 against Thursday’s close of 82,000.71, sliding to an intra-day low of 81,291.77. The Nifty finished at 24,870.10, down 213.65 points or 0.85 per cent.
Analysts said the consumption sector is expected to benefit from a favorable monsoon, low interest rates, and indirect tax relief. (Source: IANS)
