Indian benchmark indices are likely to open with a gap-up on Monday, thanks to a slew of positive news from the domestic and global indicators. The positive trend, as hinted by Gift Nifty, which is signaling 200 point-plus opening, is largely driven by the development over the extended weekend on Dalal Street.
The key list of developments revolve around resumption of trade talks between India and the US, which are on hold for now; signs of India paring Russian crude imports; GST rationalization announced by the PM Modi; and India’s rating upgrade from S&P Global. Here’s are the major factors that will steer the action at Dalal Street today:
GST reforms
Prime Minister Narendra Modi in his Independence Day address on August 15 announced mega GST reforms as a ‘Diwali gift’ ahead of the festival on October 20 later this year. Once approved, the new framework would represent the most significant overhaul of GST since its launch in July 2017, impacting businesses, consumers, and state finances alike.
Structural reforms in GST are quite welcome, with many of the pain points of the industry, such as registration related issues, addressing the inverted structure and resolution of classification related disputes etc, set to be addressed along with one of the biggest demands of rate rationalisation and reduction in tax rate slabs, said Karthik Mani, Partner of Indirect Tax at BDO India.
S&P raises India’s rating
S&P Global has raised India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-‘, with the short-term rating upgraded to ‘A-2’ from ‘A-3’. The stable outlook reflects confidence in India’s strong economic fundamentals and prudent policy management. India has received its first sovereign credit rating upgrade in 18 years.
S&P Global Ratings upgraded India’s outlook, projecting GDP growth at 6.5 per cent for FY26, while noting that US-imposed tariffs would have minimal impact given India’s limited export dependence, said Ajit Mishra, SVP of Research at Religare Broking.
Trump Putin meet
A high-stakes Alaska summit between US President Donald Trump and Russian counterpart Vladimir Putin yielded no agreement to resolve or pause in war with Ukraine, although the powerful leaders described the talks as productive before heading home.
The US-Russia summit failed to arrive at a final decision, although it made some progress. India’s additional 25 per cent tariff remains an overhang, though there were some encouraging comments from the US President, said Emkay Global. “We see the possibility of a negotiated settlement on this issue before the August 27 deadline,” it added.
Controlled inflation
India’s CPI inflation eased further to 1.55 per cent YoY in July, down from 2.1 per cent in June 2025. Core inflation was steady at 4.2 per cent vs 4.28 per cent earlier. The sharp moderation was largely driven by a deeper decline in food inflation, given its higher base.
The favourable rating action was a product of improvement in fiscal consolidation, success in anchoring inflationary expectations and maintaining a sound external position, said Radhika Rao, Executive Director and Senior Economist at DBS Bank. “Growth is projected at a realistic 6.5 per cent, along with inflation to settle within 4-4.5 per cent until 2028,” she said.
FIIs record short positions
FIIs have remained net sellers of the Indian equities in the cash segment, offloading shares worth Rs 21,000 crore in the first half of August 2025. The Nifty had headed into the truncated last trading week with FII short positioning being at the lowest level since March 2023. If the market opens higher, one can expect short covering.
Trump tariffs and the straining of relations between US and India have impacted the market sentiments and, consequently, shorts have piled up pulling the market down, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “The tepid earnings growth, elevated valuations and modest projection of 8-10 per cent earnings growth for FY26 have emboldened the bears to increase short positions, impacting the market,” he added.
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