Stock Market Updates: GST Overhaul Sends Sensex Skyrocketing by Nearly 900 Points

Sensex Soars 900 Points as GST Overhaul Boosts Market Sentiment

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: September 04, 2025

Summary: The GST Council lowered rates to 5% and 18%, helping the auto, FMCG, and consumer industries, and markets rose.

Indian stock markets rose on Wednesday as the GST Council made major tax reforms. The Sensex jumped by 900 points, and the Nifty went up by around 1%, as investors reacted positively to reforms expected to boost consumption across the economy.

What Changed?

The GST Council simplified the tax structure by narrowing it to just two main slabs—5% and 18%—and introduced a luxury/sin category at 40%. The updated rates will benefit everyday essentials, small cars, personal care items, and even health and life insurance, lowering costs for consumers across the board.

Market Impact

Consumers and investors have a positive response to the situation. The automotive industry experienced a significant surge, with Mahindra & Mahindra jumping almost 8%. Eicher Motors, TVS, and Hero MotoCorp also achieved notable increases.

Simultaneously, FMCG stocks increased by as much as 7% due to tax reductions on essential products like soaps, chocolates, and biscuits.

Out of 16 sectors, 10 showed gains, driven by a positive outlook in the auto, consumer durables, and real estate sectors.

Broader Implications

The GST reform is a "consumption revival bombshell" that will enhance festive demand and long-term growth. Some analysts estimate GDP could get a 100–120 basis point lift over the next 4–6 quarters.