Indian stock markets saw a strong upward movement on Thursday after the Union government announced major reforms to the Goods and Services Tax (GST) system. The Sensex surged by nearly 700 points, surpassing 81,000, while Nifty gained 156.65 points, reaching 24,871.70, by 9:30 AM.

This positive momentum came after Finance Minister Nirmala Sitharaman unveiled the long-awaited overhaul of the GST system on Wednesday evening. The changes include a reduction in taxes on essential goods such as household items, medicines, and small cars. The GST Council has also streamlined the tax structure by consolidating the existing four-rate system (5%, 12%, 18%, and 28%) into two main slabs of 5% and 18%. A special 40% rate will apply to select high-end products like luxury cars, tobacco, and cigarettes. These new tax rates will be effective from September 22, with the exception of a few products like pan masala and bidis.

Experts believe the announcement has set the stage for a potential market rally, particularly as the festive season approaches. The optimistic outlook is further bolstered by strong economic indicators, such as a multi-quarter high GDP, robust PMI data, and rural demand fueled by good monsoons. Analysts are hopeful that the GST cuts will boost consumption and formalize the economy, helping markets reach new highs.

Ajay Bagga, a banking and market expert, pointed out that the current market conditions are ideal for a bull run. He also mentioned that a potential resolution of tariff issues with the US could spark a significant rally, particularly heading into the festive season.

This rally in the stock market has reignited hopes for a strong pre-Diwali boost, with many predicting a possible all-time high for major indices in the near future.

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