Markets React to Trump–Putin Talks and Modi’s GST Reforms

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17 Aug, 2025

Markets React to Trump–Putin Talks and Modi’s GST Reforms

1. Global Sentiment Gets a Lift

U.S. President Trump and Russian President Putin reached an “understanding” during their meeting in Alaska—even though it wasn’t a final agreement—which has helped ease geopolitical tensions. This development is expected to buoy global investor sentiment going into Monday’s market session.

2. Domestic Catalyst: GST Overhaul

Prime Minister Modi, in his Independence Day address, announced sweeping GST reforms set to take effect around the festive season (Diwali). The proposal includes consolidating current 12% and 28% slabs into just 5% and 18% and shifting most goods from higher slabs down significantly. This is seen as a major stimulus to consumption and investor confidence.

3. Market Outlook: A Positive Opening Ahead

Combining improved global cues and domestic policy impetus, analysts forecast a bullish market open—particularly for consumption-driven sectors. However, gains may remain capped, with the Nifty 50 facing resistance near the 24,800 level.

4. Key Sectors Likely to Shine

Domestic consumption segments—such as banking & finance, telecom, aviation, FMCG, construction materials (cement), capital goods, and hospitality—are expected to particularly benefit from stronger purchasing power and festive demand.

5. Why Tariff Worries May Take a Backseat—for Now

Despite ongoing uncertainties from U.S. tariffs, analysts believe markets have already priced in much of the downside. Domestic institutional investor inflows have acted as a cushion, and India’s diverse economy (services, consumption, manufacturing, tech) provides resilience against export shocks.

Summary Table

Trigger	Expected Impact on Indian Markets
Trump–Putin talks	Improved global sentiment, encouraging risk appetite
GST rate cuts (5% & 18%)	Boost to consumption, earnings outlook, and investor sentiment
Domestic sector strength	Positive tailwinds for consumption-sensitive industries
Export-side vs domestic focus	Short-term resilience, capped gains amid tariff scrutiny

Bottom Line: Monday’s markets are likely to open on a positive note, fueled by hawkish global signals and domestic fiscal reform. While momentum may be tempered by lingering uncertainties like tariffs, sectors tied to consumption and domestic growth are key investment areas to watch.

By Nehal Taparia

This content is for educational and knowledge purposes only and should not be considered as investment or Trading advice. Please consult a certified financial advisor before making any investment or Trading decisions.

Our Recent FAQS

Frequently Asked Question &
Answers Here

Q1: What did Trump and Putin accomplish?

They didn’t finalize a ceasefire or treaty but ended their meeting on a relatively positive note, which calmed markets globally.

Q2: What do Modi’s GST reforms entail?

The government plans to eliminate the 12% and 28% GST slabs, keeping only 5% and 18%. Around 99% of items currently in the 12% bracket would move to 5%, and approximately 90% of 28% items would shift to 18%, easing prices and bolstering demand.

Q3: Which market segments are poised to benefit most?

Consumption-led sectors like FMCG, banking, telecom, aviation, hotels, cement, and general capital goods stand to gain from boosted consumer spending in the coming months.

Q4: Will the market see a strong breakout?

A positive opening is expected, but gains may be modest. The Nifty 50 might face resistance around the 24,800 mark.

Q5: Aren’t U.S. tariffs still a concern?

While still valid, much of the risk may already be priced in. Domestic institutional investor inflows have helped cushion potential shocks. Plus, India’s broad economic base provides added resilience.