Indian shares ended higher on Monday as consumer goods makers such as ITC Ltd surged on hopes the newly implemented goods and services tax (GST) would reduce retail prices and boost sales. The broader NSE index closed up 0.99 percent at 9,615, while the benchmark BSE index ended 0.97 percent higher at 31,221.62. Earlier in the session, both indexes posted their biggest intraday percentage gains since May 25.
ITC shares surged as much as 9.6 percent to hit a record high of 354.8 rupees India on Saturday rolled out its biggest tax reform in the 70 years since independence from British colonial rule, replacing more than a dozen federal and state levies with the GST. The unveiling of GST led some of India's biggest automakers and retailers to announce price cuts, although many companies shied away from doing so due to the complexity of the new system.
"FMCG companies like ITC are going to benefit in the long run from the GST rollout," said Anupam Singhi, chief operating officer at independent research firm William O'Neil India. Cigarette maker ITC was among the top gainers, rising as much as 9.62 percent to a record high of 354.80. It drove the Nifty index higher, contributing nearly 45 net points to the index.
Carmaker Maruti Suzuki India gained as much as 1.8 percent after posting a 7.6 percent jump in June vehicle sales on Saturday, while commercial vehicles maker Ashok Leyland climbed to its highest in a year after reporting an 11 percent rise in June total sales. Shares of fertiliser makers surged after GST rate for fertilisers was slashed to 5 percent on Friday. Chambal Fertilisers and Chemicals Ltd was up as much as 4 percent while Nagarjuna Fertilizer & Chemicals and Madras Fertilizers gained more than 3 percent.