GST Rollout Boosts Nifty, ITC Surges 6%

ITC shares surged with analysts attributing the sharp move to a more or less status quo in terms of taxation on cigarettes in the new GST regime.

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GST Rollout Boosts Nifty, ITC Surges 6%

ITC have earlier faced successive years of excise duty hike on cigarettes

Indian stock markets moved higher on Monday, boosted by rollout of GST or goods and services tax and positive Asian markets. ITC shares surged over 6 per cent with analysts attributing the sharp move to a more or less status quo in terms of taxation on cigarettes in the new GST regime. This comes as a sentiment booster for ITC shares after successive years of excise duty hike on cigarettes. Among other top gainers, Maruti Suzuki, Vedanta, Bharti Infratel, and Hindalco rose over 1 per cent. Over the weekend, Maruti Suzuki announced price cuts on select models after the GST regime kicked in from July.

Analysts say that the Street would be looking at GST implementation over the next few months and the impact to particular sectors. "We expect markets to remain volatile and track the management commentary on how they are adjusting to the issues arisen due to the GST," domestic brokerage Angel Broking said in a note.

Meanwhile, implementation of GST will be positive for India's credit rating as it will lead to higher GDP growth and increased tax revenues, Moody's Investors Service has said.

"Over the medium term, we expect that the GST will contribute to productivity gains and higher GDP growth by improving the ease of doing business, unifying the national market and enhancing India's attractiveness as a foreign investment destination," Moody's VP (sovereign risk group) William Foster said.

On the technical side, the Nifty faces resistance at 9,560-9,600 levels, say experts.

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Elsewhere, Ashok Leyland's shares surged nearly 5 per cent after the commercial vehicle maker recorded a 11 per cent sales growth in June.

At 9:45 am, the Sensex was up 122 points at 31,043, off its early high of 31,258. The Nifty hovered around 9,550, up around 30 points.

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