The Indian stock market is expected to open higher on September 4, 2025, with positive cues from GIFT Nifty and the announcement of new GST rates.

GST Rate Rationalization

The GST Council met on Wednesday and announced a rationalization of indirect taxes, expected to go into effect on September 22, 2025. The new GST regime will feature three primary slabs: 5%, 18%, and 40%. Finance Minister Nirmala Sitharaman stated that these GST reforms are projected to lead to a GST rate drop on 396 items, which should benefit the common person.

According to market experts, the GST Council meeting outcome is likely to positively impact the Indian stock market, with expectations of a gap-up opening on Thursday. The GST reforms are seen as both an economic catalyst, simplifying compliance, lowering costs, and boosting consumption, and a strategic buffer against global tariff shocks.

Several sectors are expected to benefit from these changes, including consumer goods, electronics, the automobile sector, the cement sector, and retail and consumer durables. Items such as hair oil, toilet soap, toothbrushes, cycles, and tableware will fall under the 5% GST bracket. Essential items like paneer and Indian breads have been exempted from GST. Packaged foods, including namkeen, sauces, pasta, instant noodles, coffee, butter, ghee, cornflakes, and chocolates, will also be taxed at lower rates.

The government expects businesses to pass on the benefits of lower GST rates to consumers. Goods already in stock that will see a reduction in GST will have to be sold at the new tax rate after September 22, and businesses will be able to claim credit for the reduced tax.

Market Analysis and Predictions

On Wednesday, the Sensex gained 409.83 points, or 0.51 percent, closing at 80,567.71, while the Nifty 50 rose by 135.45 points, or 0.55 percent, ending at 24,715.05.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that the Sensex formed a bullish candle on daily charts and is holding an uptrend continuation pattern on intraday charts, which is largely positive. He identified 80,700 as the immediate resistance zone, with a successful breakout potentially pushing the Sensex towards 81,000–81,200. Key support zones are at 80,200 and 80,000, but a fall below 80,000 could make the uptrend vulnerable.

The Nifty is currently placed around the 20- and 50-day extended moving average placed around 24,800 levels, which is likely to act as an immediate resistance. The index is expected to consolidate in the range of 24,400-24,800, and a breakout above 24,800 will open a further pullback towards 25,000 levels.

Maximum Nifty Call Open Interest (OI) is placed at the 24,800 strike, followed by the 25,000 strike, highlighting these levels as key resistance zones. On the Put side, the highest OI is seen at the 24,700 strike, followed by the 24,600–24,500 strikes, which are likely to act as strong support levels. This OI setup suggests that the 24,700–24,800 range will be crucial for Nifty 50's near-term movement.

Analysts predict a possible breakout in the Nifty towards the 25,000 mark, while cautioning that the Bank Nifty shows signs of consolidation and bearish undertones. The Bank Nifty has immediate support at 53,500-53,300 levels.

Global and Domestic Cues

Gift Nifty is up 0.81%, indicating a firm opening for Indian markets, supported by strength in banking and metal counters. Strong gains across European markets may aid sentiment, though weak cues from Wall Street could limit aggressive upside. Continued FII outflows remain a concern, but steady DII buying may provide a cushion, keeping intraday volatility in play.