Indian equities opened the week on a strong note, with benchmark indices surging in early trade on Monday, August 18. Optimism around GST reforms and a landmark sovereign ratings upgrade by S&P Global fuelled the rally, while auto and banking stocks provided the thrust.

At 11 am, the Sensex jumped 950 points, or 1.18 percent, to 81,548, while the Nifty surged 385 points, or 1.56 percent, to reclaim the 25,000 level at 25,016 before coming down to 24,960 at 11 am. Market breadth was firm, with 2,342 shares advancing, 967 shares declining, and 163 shares unchanged. Mid- and small-caps also rose nearly 1 percent.

How the Market Rallies

Two major developments triggered this change. S&P Global’s upgrade of India’s sovereign rating to BBB from BBB, the first in 18 years, is expected to strengthen investor confidence and attract foreign inflows. At the same time, Prime Minister Narendra Modi’s Independence Day speech had hinted at “next-generation GST reforms” by Diwali, raising hopes of a simplified tax structure that could benefit consumption-linked sectors.

“The S&P upgrade and expectations of GST rationalisation have led to a more constructive perspective. Alongside global developments and short-covering potential, Indian markets may be entering a stronger phase,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

What the Sectoral Trends say

Autos led the rally, with the Nifty Auto index jumping 3.6 percent on reports of a possible GST cut on two-wheelers, compact cars, and hybrids. Hero MotoCorp, Maruti Suzuki, Bajaj Auto, M&M, and Tata Motors gained up to 8 percent, with Hero MotoCorp topping Nifty gainers.

Banks also paced up with this move, as the Nifty Bank index rose by 1.2 percent and private banks gained 1.4 percent. Consumer durables, metals, infra, and PSU banks traded higher, while IT and pharma stocks remained weak. Volatility edged higher, with India VIX up 2.8 percent.

Where Stock Action focuses

Vodafone Idea shot up 3 percent after reporting a narrower Q1 FY26 loss of ₹6,608 crore and a higher ARPU of ₹177. Tobacco and online gaming stocks slipped after reports of a 40 percent GST slab on sin goods, with ITC, Godfrey Phillips, Nazara Tech, and Delta Corp down up to 2 percent.

According to market analysts, Nifty faces resistance at 24,700–24,800; a breakout could trigger short covering, while a slip below 24,500 may drag it to 24,320. Trend remains sideways.

 Overall, it is anticipated that the markets may stay volatile, but GST reform hopes and global cues could drive inflows into banking and consumption sectors.