The Indian stock market is poised for a positive opening on Monday, August 18, 2025, buoyed by a confluence of favorable domestic and international cues that emerged over the weekend. The Gift Nifty indicates a strong start, with trends suggesting a gap-up opening for the Indian benchmark index.
GST Reforms: Prime Minister Narendra Modi's Independence Day announcement of potential Goods and Services Tax (GST) reforms has instilled optimism in the market. The proposed changes, hailed as a "Diwali gift," aim to revamp the indirect tax regime. The government is considering a two-tier GST structure with 5% and 18% slabs. Most products and services taxed at 12% and 28% may be shifted to the 5% and 18% slabs, respectively. Items in the 28% bracket could move to a new 40% slab. These reforms, the most significant since the GST's launch in July 2017, are expected to positively impact businesses, consumers, and state finances. Structural reforms addressing registration issues, inverted structures, and classification disputes are also anticipated.
S&P Global Ratings Upgrade: S&P Global has upgraded India's long-term sovereign credit rating to 'BBB' from 'BBB-' and the short-term rating to 'A-2' from 'A-3'. This upgrade, the first in 18 years, reflects confidence in India's strong economic fundamentals and prudent policy management. The stable outlook indicates expectations for continued economic growth, with S&P projecting a GDP growth of 6.5%.
Trump-Putin Meeting: The meeting between US President Donald Trump and Russian President Vladimir Putin has raised hopes for a potential resolution to the war in Ukraine. While the meeting was inconclusive, it is seen as a step towards de-escalation and a potential end to the conflict, which could positively impact global markets.
Global Market Cues: Asian markets traded mixed on Monday. Japan's Nikkei 225 and Topix indices rose, while South Korea's Kospi and Kosdaq indices fell. US markets ended higher last week, fueled by hopes for rate cuts by the Federal Reserve.
Technical Analysis: Sensex has formed reversal patterns on daily and intraday charts, signaling a positive outlook. A bullish candle on the weekly charts suggests a continuation of the pullback in the near future. According to Amol Athawale, VP Technical Research, Kotak Securities, 80,300 will act as a key support zone for short-term traders. As long as Sensex trades above this level, the bullish sentiment is likely to continue. On the higher side, 80,900 would be the immediate resistance zone for the bulls. A successful breakout above 80,900 could push the index towards 81,500 - 81,800.
Other Factors: Investors will also be closely watching the US Federal Reserve meeting minutes, developments in US-Russia peace talks, potential US tariffs on India, the flow of foreign funds, and IPO activity.
