Nifty Performance: Market turmoil after GST 2.0 and expectations for the next week
The market world is always full of excitement and uncertainty. Indian equities got off to a strong start last week when the GST Council announced new tax reforms and cuts. Investors thought a big rally would now begin that would take Nifty performance to new heights. But as the days passed, that momentum slowly fizzled out and by Friday Nifty had given back its early gains. This development was a reminder to market investors that there is always a gap between sentiment and reality.
Start of GST 2.0 and Nifty Performance
Initially, the sweeping reforms of the GST Council gave a fresh energy. Tax rates were simplified and levies on essentials were reduced, due to which Nifty crossed the level of 24,700. The most rapid growth in the market was seen in Autos and FMCG stocks, as investors believed that a lower GST would boost consumption. Due to this optimism, Nifty Metal and Nifty Auto indices jumped more than 5% in a week.
Seeing all this, it seemed that GST 2.0 would take Nifty performance towards a new bull run. But the picture changed soon.
IT Stocks under Pressure and Global Headwinds
The mood of the market changed suddenly when IT stocks started taking pressure. Concerns about weak global demand and discretionary tech spending cuts became a red flag for IT sector investors. Along with this, instability in global markets is also a negative factor for India.
In Europe, bond yields reached decade highs, foreign investors started withdrawing money from Indian equities, and the rupee slipped to a record low. Gold prices also moved to new peaks due to safe-haven buyers. All these developments gave a clear signal that sustaining the rally for Nifty performance will not be easy.
By the end of the week, Nifty showed a gain of just 200 points, which was a decent rise, but the market mood was significantly subdued as per expectations.
Analysts’ Perspective on Nifty Performance
Experts say that GST reforms lay the foundation for long-term growth, but its impact will not be visible immediately.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said that the benefits of GST rationalisation are already visible in mid-cap and small-cap stocks. He also added that if Nifty crosses 25,000, there can be scope up to 25,250, while 24,350 is a crucial support zone.
On the other hand, Ross Maxwell, Global Strategy Lead at VT Markets, highlighted a different point. According to him, India’s Nifty performance has been weak compared to its Asian peers. Foreign investors are shifting towards cheaper markets like Taiwan, South Korea and China. High US tariffs and weak corporate earnings momentum are becoming a hurdle for India in the short term.
Nifty Performance: Picture of Next Week
Next week investors will be keeping an eye on both domestic and global signals. On the domestic front, GST cuts and government spending are expected to benefit consumption-driven sectors such as autos and FMCG. But weak urban demand and cautious corporate sentiment still pose a risk.
On the global stage, US economic data will be most important. Jobs report and inflation numbers will decide whether the Fed cuts interest rates or not. If there is a possibility of rate cuts, it will be a relief for emerging markets including India. ECB’s policy stance will also be closely monitored.
According to technical charts, Nifty is currently trying to form a base in the 24,500-24,350 zone. But resistance is strong at 25,000. If a breakout is achieved, fresh momentum can come, otherwise Nifty can slide to 24,100 if it falls below 24,350. It will be critical for Bank Nifty to reclaim 55,000 so that the rally can start higher.
Is Nifty performance still hopeful?
Market experts say that the expected fireworks from GST 2.0 hype did not come, but the story is not over yet. With domestic policy support, steady consumption and if global rates ease, Nifty performance can enter a new rally phase. Investors will have to be patient and wait for the next triggers of the market.
The big question is whether Nifty will give redemption this week? The answer to this will come with time, but one thing is clear—the resilience of Indian equities is still intact and the market journey is always unpredictable.
Disclaimer:
This article is for informational purpose only. The views and analysis given in it are based on the insights of market experts. Always consult your financial advisor before taking investment decisions.
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