NIFTY extends gains as GST reform sparks hopes of consumption boost

26 Aug 2025 , 12:51 PM

Weekly Market Wrap – GST powered rally

The week started with a sharp rally across the indices as stocks gained on GST reform hopes. While banking stocks gave up the gains and ended the week in the red, many sectors witnessed a significant uplift. Auto, Consumer Durables, FMCG, and Real Estate stocks were among the best performers. Also, midcaps outperformed large caps for the first time in 5 weeks.

Weekly Performance: 1.0%

date	open	high	low	close
2025-08-22	25064.2	25084.8	24859.2	24870.1
2025-08-21	25142.0	25153.7	25054.9	25083.8
2025-08-20	24965.8	25088.7	24929.7	25050.6
2025-08-19	24891.3	25012.7	24873.9	24980.7
2025-08-18	24938.2	25022.0	24852.8	24876.9
2025-08-14	24607.2	24673.7	24596.9	24631.3

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY 50 index gained by 0.97% for the week ending on August 23, 2025, and the market reported mixed performances from its constituents. Auto stocks performed well. Maruti, Hero, M&M, and Bajaj Auto were among the top performers and gained 4% to 11%. FMCG major – Nestle and Hindustan Unilever – also sported significant rallies. On the other hand, HDFC Bank, ITC, Coal India, L&T, and Bharat Electronics were the top losers, with ITC being the worst performer, experiencing a 3.20% fall.

After a continuous streak of losses, NIFTY ended in the green for the past two weeks. GST reform optimism propelled most of the biggest gainers. FMCG and Auto majors rallied strongly on hopes of a GST rate cut, though the exact amount is not clear yet. Similar positivism also drove telecom-related stocks – Bharti Airtel and Reliance.

NIFTY MIDCAP SELECT – Outperforms large-caps

Weekly Performance: 2.3%

date	open	high	low	close
2025-08-22	12953.8	12978.0	12907.4	12935.8
2025-08-21	13049.5	13057.3	12913.2	12921.3
2025-08-20	12912.0	13020.8	12867.2	12999.8
2025-08-19	12845.5	12922.2	12745.6	12908.3
2025-08-18	12800.2	12905.2	12771.8	12811.3
2025-08-14	12718.5	12743.0	12601.0	12639.1

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY MIDCAP SELECT index ended higher by 2.35% for the week ending August 23, 2025, marking its second consecutive week of gain. Major gainers in the pack were CoForge, Indus Towers, Idea, and Ashok Leyland, rising between 6.14 % and 14.96 %. On the other hand, BSE, Bharat Forge, and Aurobindo Pharma turned out to be the top losers with losses in the range of 3-6 %. Most of the top gainers were driven by uplifting sentiment on account of GST reform hopes. Auto, Telecom, and FMCG themes were notable performers.

For the first time in the past five weeks, midcap stocks outperformed large-cap stocks last week.

NIFTY IT – Tide Turning as Index Registers Weekly Gains

Weekly Performance: 1.7%

date	open	high	low	close
2025-08-22	35735.4	35767.1	35415.4	35440.9
2025-08-21	35918.8	35922.6	35461.4	35723.9
2025-08-20	34647.2	35773.6	34647.2	35690.1
2025-08-19	34618.9	34825.3	34549.1	34756.7
2025-08-18	35152.7	35158.7	34514.0	34634.9
2025-08-14	34732.2	35332.2	34732.2	34833.2

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY IT index ended up 1.74 % for the week ended August 23, 2025, extending its gains from last week. Midcaps – Coforge & Mphasis witnessed strong rallies and were top performers. Infosys was the best performer among large caps. Barring HCL Tech, the rest of the stocks gained, highlighting the overwhelmingly positive advance-decline ratio.

IT stocks have closed in the green for two consecutive weeks. In addition to the broader market rally, a sector rotation has been among the likely reasons for its continued outperformance.

NIFTY BANK – Underperformance worsens

Weekly Performance: -0.3%

date	open	high	low	close
2025-08-22	55669.2	55745.0	55102.6	55149.4
2025-08-21	55972.1	55993.6	55708.2	55755.4
2025-08-20	55751.5	55812.6	55577.4	55698.5
2025-08-19	55622.3	55965.6	55608.1	55865.1
2025-08-18	55940.6	56156.3	55647.6	55734.9
2025-08-14	55102.6	55472.8	55074.3	55341.9

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY BANK index closed the week flat with a loss of 0.35%. It was among the worst-performing indices for the week. The market breadth was not too bad, as 6 gained against 4 losses. However, HDFC Bank’s 1.3% drop weighed heavily on the overall index. IDFC First Bank was the top gainer at more than 1%. On the other hand, HDFC Bank, State Bank of India, IndusInd Bank, AU Small Finance Bank, and Bank of Baroda ended as the top losers.

 

Banking stocks have been outperforming in 2025. Over the past two weeks, banking stocks have likely seen selling pressure due to sector rotation into potential GST beneficiaries and other underperforming sectors.

NIFTY ENERGY – Ekes out a modest gain. Underperforms again.

Weekly Performance: 0.1%

date	open	high	low	close
2025-08-22	34687.2	34729.9	34477.9	34507.6
2025-08-21	34906.8	34987.1	34658.7	34681.6
2025-08-20	34766.6	34939.8	34766.2	34847.9
2025-08-19	34561.5	34789.7	34499.2	34768.1
2025-08-18	34812.7	34822.5	34364.6	34483.2
2025-08-14	34780.9	34804.5	34419.0	34469.1

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY ENERGY index is up by 0.11% in the week ending August 23, 2025, with a mixed performance across its constituents. Many renewable energy stocks were among the top performers. SJVN, Inox Wind, Triven Turbine, and Adani Green gained 4% to 8%. Heavyweight, Reliance, also performed strongly. Market breadth was also positive at 23 advances to 16 declines. However, the index was dragged by Suzlon and Coal India, with each of them falling 2.5%.

NIFTY ENERGY has underperformed NIFTY significantly over the past five weeks. It has underperformed nearly every week. Stock-specific newsflow impacted Inox Wind and Suzlon last week. Inox Wind surged over 5% after a ₹175 cr stake sale in its EPC arm. On the other hand, Suzlon witnessed continued selling pressure after concerns over management stability following its CFO’s resignation.

Nifty FMCG: Gains on GST reform optimism

Weekly Performance: 2.0%

date	open	high	low	close
2025-08-22	56303.6	56429.0	55694.4	55737.4
2025-08-21	56713.3	56719.8	56204.9	56303.1
2025-08-20	55854.4	56786.6	55675.8	56664.1
2025-08-19	55382.1	55966.4	55154.7	55886.6
2025-08-18	55379.8	55775.4	55223.9	55304.2
2025-08-14	55089.1	55139.6	54573.8	54656.3

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY FMCG gained strongly for the week. After two consecutive weeks of decline, the index gained ~2% last week. Nearly all of the constituents gained (13 gainers vs 2 losers) as the index witnessed a broad-based rally on the back of GST reform expectations. Hindustan Unilever, Nestle India, Godrej Consumer Products, Colgate, and Emami were the top gainers in the index as each of them gained more than 5%. Only UBL and ITC fell during the week.

GST-related newsflow impacted both the gainers and losers for the week. While FMCG majors gained on the expectation of lower GST, speculation of a higher 40% ‘Sin Tax’ impacted alcohol and tobacco majors UBL and ITC.

NIFTY AUTO – Zooms on GST reform hopes

Weekly Performance: 5.0%

date	open	high	low	close
2025-08-22	25409.1	25464.8	25291.6	25329.4
2025-08-21	25559.7	25562.5	25322.3	25377.5
2025-08-20	25516.4	25518.9	25412.6	25469.2
2025-08-19	25172.5	25486.3	25031.2	25456.7
2025-08-18	24804.7	25281.9	24782.3	25127.2
2025-08-14	24136.3	24233.3	24034.1	24118.8

Source: NSE

Figure: Recent performance

Source: NSE

NIFTY AUTO gained in the past week, up by 5.02% after strong performances were seen from key auto players. Top-3 gainers included Maruti Suzuki, Ashok Leyland,  Mahindra, and TVS Motor, rising 7.5% to 11%, respectively. These rallies helped the index register its biggest weekly gain in five weeks. On the other hand, Bharat Forge was the only notable decliner.

A demand boost from a likely GST cut was the key factor driving the rally. The index notched its third consecutive week of gain and another week of strong outperformance vs NIFTY.

NIFTY PHARMA – Consolidates after a strong week

Weekly Performance: 0.5%

date	open	high	low	close
2025-08-22	22213.2	22304.7	22171.6	22265.0
2025-08-21	21958.7	22253.7	21867.8	22177.7
2025-08-20	22069.6	22093.7	21899.7	21969.5
2025-08-19	22167.1	22177.4	22030.6	22066.8
2025-08-18	22243.5	22253.3	22038.7	22141.2
2025-08-14	22176.8	22370.4	22077.5	22151.8

Source: NSE

Figure: Recent performance

Source: NSE

The NIFTY PHARMA index closed the week with a relatively small gain, up by 0.51%, as the components had mixed reactions. The biggest gainers were Cipla, Mankind Pharma, Laurus, and IPCA Laboratories, rising between 2% and 5.5%. Meanwhile, top losers were Glenmark Pharmaceuticals, Aurobindo Pharma, and Abbott India, down 3.2% to 5.25%. While the market breadth was positive, strong losses at Glenmark and Abbott kept the index performance in check.  Also, after a strong rally in the past week, some of the stocks likely witnessed profit booking.

NIFTY REALTY –  Stages a smart rally

Weekly Performance: 3.4%

date	open	high	low	close
2025-08-22	918.5	919.2	908.5	909.7
2025-08-21	917.8	930.5	915.3	917.3
2025-08-20	905.5	916.9	902.4	913.8
2025-08-19	900.2	905.2	889.7	904.3
2025-08-18	890.2	907.0	887.6	898.5
2025-08-14	888.9	893.2	877.2	879.3

Source: NSE

Figure: Recent performance

Source: NSE

NIFTY REALTY index saw a significant rally during the week ended August 23, 2025, with an increase of 3.45% over the week ended August 16, 2025. Except for Sobha, all of the stocks gained. Phoenix and Godrej Properties were the top performers as they gained 10% and 6% respectively. Hopes of lower GST on under-construction homes and lower GST on construction materials have likely led the rally in real estate stocks.

The index has witnessed a volatile performance of late. Notably, external factors have resulted in significant rallies and corrections. RBI’s jumbo rate cut in June had led to a significant rally followed by a prolonged selling pressure. The current sharp rally is likely driven by hopes of lower GST benefiting real estate players.