Updated 18 August 2025 at 07:39 IST
Ajay Bagga: Will GST Cuts And S&P Upgrade Drive A Market Rally?
Market expert Ajay Bagga said Indian equities are set for a gap-up opening, aided by GST cut signals and India’s sovereign rating upgrade by S&P. He cautioned investors to watch global geopolitical meetings, while noting positives for consumption and infra sectors. US tariff concerns remain a key risk for markets.
Indian markets today: The world is looking for geoeconomic cues from the White House meeting between US-EU-Ukraine leaders on Monday.
The Alaska Summit between President Trump and President Putin did not yield a ceasefire announcement, but the subsequent developments are pointing to a possible deal this week itself.
Asian markets are mixed, with the Nikkei hitting another record level. European and US stock futures are higher.
India has two positives, one watchful and one negative cue this morning.
The two positives are: a. the GST cuts within the next 50 days announced by the PM during his Independence Day speech, by the Sovereign Rating upgrade for India announced by S&P Global, and the subsequent raising of ratings of 16 top Indian corporates/banks and financial firms.
The watchful cue is, of course, the US-EU-Ukraine meeting outcome tonight
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The negative is that the US has pulled back from the visit of its trade delegation to India that was to start from August 25th.
While Trump ruled out further secondary tariffs on countries dealing in Russian energy and goods, the 25% additional, punitive tariffs on Indian goods exports to the US are still on track for an August 27th implementation. The hope is that some detente with Russia removes this overhang this week.
Gift Nifty is indicating a nearly 1% gap up opening on the back of the economic boost expected due to the tax cuts and the investment flows expected in the bond markets subsequent to the sovereign ratings upgrade. Follow-through buying will be critical, given the relatively high valuations of Indian stocks and the underwhelming earnings season for the last quarter.
The reduction in GST rates will be positive for consumption, financials, auto, and consumer durable stocks. The focus remains to invest in domestic-oriented and domestic beneficiary sectors that will benefit from the consumption boost and continued public infrastructure investments. Subdued oil prices will help downstream industries as well as end consumers
Published By : Gunjan Rajput
Published On: 18 August 2025 at 07:39 IST