Mumbai, September 6 – Indian stock markets closed the week on a positive note as the government reduced GST rates, boosting investor confidence in consumer-oriented sectors. However, the Indian rupee fell to a new all-time low of Rs 88.36 against the US dollar, reflecting pressure from global trade tensions and foreign capital outflows.
Equity Market Performance
The Sensex and Nifty 50 closed firmly in positive territory on Friday. Market gains were led by automobile, consumer durables, and footwear companies, as lower GST rates are expected to improve affordability and boost festive-season demand. Shares of several consumer-focused firms surged between 5–7% during the session.
Analysts noted that the rate cuts could significantly lift consumption. According to estimates, reduced tax rates may unlock up to ₹10 lakh crore of additional consumer spending annually, providing a major tailwind for India’s domestic demand recovery.
GST Relief Measures
The GST Council’s latest decisions included lowering tax rates on:
Small cars
Electronics and home appliances
Footwear
Select consumer products
These cuts are designed to provide immediate relief to households and strengthen purchasing power ahead of the festival season.
Rupee Under Pressure
Despite buoyant equity markets, the Indian rupee continued to weaken, hitting a record low of ₹88.36 against the US dollar in intraday trade before settling slightly higher after intervention by the Reserve Bank of India (RBI).
Currency traders attributed the fall to:
Rising concerns over the proposed US tariff hikes on Indian goods
Persistent foreign institutional investor (FII) outflows
Stronger US dollar in global markets
The rupee’s decline is raising concerns over imported inflation, as higher costs for crude oil and other imports could weigh on the economy.
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Expert Opinion
Market strategists say the GST cut is boosting consumption and growth, but rupee depreciation remains a key risk to the economy. Sectors such as automobiles and consumer goods are likely to benefit, while import-intensive industries could come under pressure.
