Markets rebounded on Wednesday after beginning the day with a cautious sentiment. As the GST Council meeting started, optimism prevailed among investors on hopes that the committee will adopt the proposed new tax slabs.
The BSE Sensex ended the session a little above 80,550, soaring more than 400 points, while the NSE Nifty50 closed trading above 24,700, climbing more than 100 points.
On the 30-share Sensex, Tata Steel, Titan, M&M, Eternal, and SBI settled among the gainers. On the other hand, Infosys, HUL, NTPC, TCS, and Airtel closed among the laggards.
In the broader markets, the Nifty Microcap250 index ended 0.99 per cent higher. Sectorally, the Metal index stood out with gains of more than 3 per cent, followed by the Midsmall Healthcare index which jumped 1.53 per cent. Meanwhile, the IT index clocked losses of 0.74 per cent.
Investor sentiment is largely tied to the outcome of the GST Council discussions on rate rationalisation. Sectors such as automobiles, FMCG, and insurance are expected to be directly influenced by potential adjustments in tax slabs, especially if the proposed removal of the 12 per cent and 28 per cent brackets is finalised.
Services Sector Sees Record Expansion
Further, mood was uplifted in the market after the Services PMI data for August showed that the services economy expanded at its fastest pace since mid-2010. The HSBC India Services PMI Business Activity Index soared to 62.9 in August from 60.5 in July, according to survey data from S&P Global.
The latest reading signals robust demand conditions and marks the strongest growth in over 15 years. Service providers pointed to efficiency gains, rising client orders and a surge in new business. New orders rose for the 49th straight month, growing at their quickest pace since the survey began, with 37 per cent of firms reporting stronger activity versus 11 per cent noting a decline.
Overseas demand also gathered pace, recording the third-fastest increase since 2014, when the international orders component was introduced. Companies cited greater interest from customers in Asia, Europe, the Middle East and the US.
Composite PMI Hits 17-Year Peak
The upturn in services also lifted overall private sector activity. The HSBC India Composite PMI Output Index rose from 61.1 in July to 63.2 in August, the steepest expansion in more than 17 years. While manufacturing continued to grow at a healthy clip, services firms were the main drivers of momentum.
Employment improved at a firmer pace compared with July, underlining the optimism across industries as demand remained resilient both at home and abroad.
Notably, in early trade, the Sensex dipped 153.28 points to touch 80,004.60, while the NSE Nifty fell 46.4 points to hit 24,533.20. Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth Rs 1,159.48 crore on Tuesday, according to exchange data. On Tuesday, the Sensex had closed 206.61 points lower at 80,157.88, while the Nifty slipped 45.45 points to 24,579.60.