Indian stock markets displayed a varied performance on August 20, 2025, with key indices experiencing divergent movements. The BSE Sensex concluded the trading day with a gain of 213.45 points, settling at 81,857.84, marking a 0.26% increase. Similarly, the Nifty index saw an uptick, closing 69.90 points higher at 25,050.55, a 0.28% gain.
This mixed performance was influenced by a confluence of factors, including anticipation of Goods and Services Tax (GST) reforms and the Reserve Bank of India's (RBI) monetary policy stance. The technology sector demonstrated significant strength, with the Nifty IT index climbing 2.69%. Infosys shares traded at ₹1,495.10, reflecting a 3.83% increase, bolstered by news of a partnership with Uniting Financial Services in Australia and a substantial employee bonus announcement. Tata Consultancy Services (TCS) also contributed to the IT sector's positive trajectory, with its shares rising 2.61% to ₹3,094.20, supported by its AI-driven operations center in Mexico City and a reported increase in consolidated net profit for Q1FY26.
Conversely, sectors such as electronics, auto finance, auto manufacturers, and trains experienced declines, indicating a broader sectoral rotation. Investors are closely monitoring potential revisions to GST rates, with expectations that simplification and potential rate cuts could stimulate demand, particularly in the automotive and consumer goods sectors. Analysts suggest that a streamlined GST structure, possibly moving towards two principal slabs, could boost discretionary consumption by approximately ₹2.4 lakh crore.
The Reserve Bank of India's Monetary Policy Committee, in its August 2025 review, maintained the repo rate at 5.5% and retained a neutral policy stance. This decision, aimed at balancing economic growth with price stability, follows cumulative rate reductions of 100 basis points since February 2025. The central bank also revised its inflation forecast for FY26 downward to 3.1%, while maintaining the GDP growth projection at 6.5%. These monetary policy decisions are expected to influence market trends, with a focus on rational investment choices.