Indian stock markets closed higher on Thursday, September 4, 2025, driven by positive sentiments following the GST Council's decision to overhaul the Goods and Services Tax (GST) regime. The BSE Sensex gained 150.30 points, or 0.19%, to close at 80,718.01, while the NSE Nifty 50 rose by 19.25 points, or 0.08%, to close at 24,734.30.
Auto Stocks Rally on GST Reforms
The auto sector was a major gainer, spurred by the GST Council's approval to rationalize tax rates across the automobile industry. The council limited the tax slabs to 5% and 18%, effective from September 22, which is expected to make small cars and entry-level bikes more affordable. Petrol, LPG, and CNG vehicles under 1,200 cc and 4,000 mm in length, along with diesel vehicles up to 1,500 cc and 4,000 mm in length, will now be taxed at 18% instead of the previous 28%. Motorcycles up to 350 cc will also benefit from a lower 18% GST rate, down from 28%.
Several auto stocks experienced significant gains. Mahindra & Mahindra (M&M) shares jumped nearly 8% in early trade. Other notable gainers included Eicher Motors, TVS Motor Company, and Hero MotoCorp. The Nifty Auto index was the top gainer on the NSE, rising 3.7% intraday.
Analysts predict that the GST reform will reduce the tax burden across auto segments and address concerns about the inverted duty structure. Emkay Global, a domestic brokerage firm, believes this move could boost demand by 5-10% across various categories. They have identified M&M, Maruti Suzuki, and Hero MotoCorp as top auto stocks to buy.
Mixed Performance for ITC
In contrast to the auto sector's rally, ITC experienced a downturn. ITC's current price is INR 415.90, a 1.01% increase in the past 24 hours. Over the past year, ITC has declined 17.86%.
Analysts' opinions on ITC's future price are mixed, with estimates ranging from a minimum of INR 450.00 to a maximum of INR 567.00. Despite recent challenges, ITC has demonstrated resilient financial performance, with its Hotels, Agri Business, and Cigarettes segments showing strong growth. The company's commitment to sustainability and strategic focus through the demerger of its Hotels business are also noteworthy.
