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Below the Quote on Daily Market Commentary for September 04th, 2025 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Nifty closed marginally higher by 0.08% at 24,734 on Thursday, with benchmark indices edging up The GST Council has approved the centre’s proposal for a simplified two-slab GST structure of 5% and 18%, effect from September 22. Broader markets underperformed, with the Nifty Midcap100 and Smallcap100 slipping 0.7% each. Sector-wise, performance was mixed. Nifty Auto led the gains, up 0.85%, while FMCG rose 0.25%, extending its rally for a fifth consecutive session as one of the key beneficiaries of the GST reforms. The GST Council approved a two-slab structure on September 3, eliminating the 12% and 28% brackets. The reform will lower rates on a wide range of essential items while raising levies on select sin and luxury goods. More of a ‘growth reform’ than a mere tax change, it is set to benefit sectors such as Automobiles, Consumer Durables, Staples, Cement, Hotels, Insurance, Retail, Renewables, Oil & Gas, and EMS. On the global trade front, India aims to conclude a bilateral trade agreement with the U.S. by November, while negotiations with the EU have reached an advanced stage. With the EU being India’s largest trading partner (USD 137.4bn in goods trade in FY24), both sides target finalizing the FTA by end-2025. While headwinds persist from continued FII outflows and uncertainty around the US trade deal, the recent GST reforms are expected to boost consumer demand, support corporate earnings, and lift sentiment, providing a strong tailwind ahead of the festive season. We expect the market to gradually move higher.

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