Markets post modest gains after GST rejig; Kerala-based stocks show mixed response

India's benchmark equity indices Sensex and Nifty surged in early trade but closed with modest gains on Thursday as initial enthusiasm surrounding the Goods and Services Tax (GST)  overhaul faded towards late trade. 

The BSE Sensex jumped by 888 points when the market opened, but closed 150 points higher at 80,718. The Nifty 50 also shed its initial 250-point surge and closed at 24,734, an increase of 19 points. 

Common-use items from roti/paratha to hair oil, ice creams and TVs will cost less, while tax incidence on personal health and life insurance will be brought down to nil after the all-powerful GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax (GST) regime.

The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri.

"The revolutionary GST reform has come with better-than-expected benefiting a wide spectrum of sectors. The ultimate beneficiary is the Indian consumer who will benefit from lower prices. The potential big boost to consumption in an economy that is already in growth momentum will be big and may surprise on the upside," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, told PTI. He added that after the initial enthusiasm, tariff issues will continue to haunt the market.

Among the Sensex firms, Mahindra & Mahindra jumped the most by 5.96 per cent. Bajaj Finance, Bajaj Finserv, Trent, ITC and HDFC Bank were also among the gainers. However, Maruti Suzuki India, Bharat Electronics, HCL Tech, NTPC, Power Grid, Infosys and Reliance Industries were among the laggards.

Kerala stocks give mixed sentiment
Following the GST rate rejig, Kerala-based stocks showed a mixed response compared to the broader market sentiment. The major gainer among Kerala companies was Solve Plastic, whose stock closed up at 4.84 per cent from the previous close. Consumer electronics company V-Guard also saw gains, rising 2 per cent.

Kitex Garments, which had declined after US tariffs took effect on August 27, ended lower after early gains, closing 5 per cent lower at ₹179.58.

Among financial companies, Dhanlaxmi Bank closed 0.45 per cent higher, while Muthoot Finance was up by 1.54 per cent. CSB Bank has risen 0.09 per cent. On the other hand, South Indian Bank decreased by 2.69 per cent, Federal Bank was down 1.73 per cent, and Manappuram Finance fell by 1.36 per cent.

Cochin Shipyard was the major laggard among the top Kerala companies, with its stock down by 3.57 per cent. Kalyan Jewellers closed at 3.28 per cent, while FACT (Fertilisers and Chemicals Travancore) declined 0.71 per cent.

Among tech stocks, Archana Software and Safa Systems have both fallen by more than 4 per cent.