Indian rupee, Sensex rise on upcoming GST cuts - and new job initiative

Dubai: The Indian stock markets and the rupee have firmed up as investor sentiments get a boost from the proposed reforms to the GST (Goods & Service Tax). The other mood changer comes from the just announced scheme to create as many 35 million jobs in the next two years.

Just after 9:30am UAE time, the Sensex is 229 points up to 81,503, while the Nifty 50 is 50 higher to 24,926 points. This is the second consecutive day of gains for the Indian markets, with the Sensex up 676.09 points, or 0.84% on Monday (August 19).

"The largest factor would be the government’s bold move to simplify GST, cutting out unnecessary slabs," said Shoaib Zaman, Director, Peepal Bodhi Capital Services, a wealth management firm based in Mumbai.

"This is considered as a structural reform that will lower costs for consumers and boost margins for companies in key sectors like autos, cement, and insurance."

It was on August 15 that Prime Minister Modi confirmed there would be changes coming to the GST slabs. And that was the trigger for Indian markets.

"Yes, the GST cuts, especially for small businesses, is changing the mood in the market," said Milan Vaishnav, founder of ChartWizard.ae.

As for the Indian rupee, it is now trading at 23.77 levels to one dirham, firming up from the 23.8 levels in recent days. In fact, this is the highest the rupee has touched since August 5, when it was 23.62.

“The GST reform announcement by Prime Minister Modi has really worked on investors,” said Neelesh Gopalan, Treasury Manager at a Dubai based online remittance platform.

“As for the rupee, there was the RBI intervention to support it when worries over Trump’s 50% tariffs were at its highest.

“Now, sentiments have changed because of the possible deal between Russia and Ukraine.”