NewsStocksIndian Equity Markets Eye Positive Opening as December GST Collections Rise 6.1% to ₹1.75 Lakh CroreIndian Equity Markets Eye Positive Opening as December GST Collections Rise 6.1% to ₹1.75 Lakh Crore
Indian equity markets are expected to open positively on Friday with Gift Nifty at 29,330 indicating a 40-point gap-up. December GST collections reached ₹1.75 lakh crore, showing 6.1% year-on-year growth, though net domestic collections declined over 5% due to increased refunds. Foreign portfolio investors, who have been net sellers of over ₹1.6 lakh crore, are expected to return as buyers given India's macroeconomic stability and approaching Q3 earnings season.
*this image is generated using AI for illustrative purposes only.
Indian equity markets are set to commence Friday's trading session on a positive note, supported by encouraging macroeconomic data and stable domestic fundamentals. Gift Nifty trading at 29,330 levels signals a gap-up opening of approximately 40 points, though analysts anticipate subdued trading volumes and relatively muted market activity.
GST Collections Show Mixed Performance
December GST collections presented a mixed picture for the Indian economy. The following table summarizes the key GST performance metrics:
| Parameter: | December Performance |
|---|---|
| Total GST Collections: | ₹1.75 lakh crore |
| Year-on-Year Growth: | +6.1% |
| Net Domestic Collections: | Declined by over 5% |
| Month-on-Month Change: | -4.3% |
Karthik Mani, Partner, Indirect tax at BDO India, explained that the net GST collections for December showed a month-on-month decline of approximately 4.3%, attributed primarily to a significant increase in refunds issued and a marginal drop in gross GST collections on domestic transactions.
Import Collections Offset Domestic Shortfall
While GST collections on imports demonstrated an uptick in December, this increase proved insufficient to compensate for the shortfall in domestic collections. The domestic collections were impacted by both increased refunds and reduced gross collections. Despite these challenges, gross GST collections on domestic transactions remained largely flat on a year-on-year basis, indicating some improvement in economic activity despite the impact of major rate cuts implemented in September.
Market Outlook and Investor Sentiment
Foreign portfolio investors remain a key focus area for market participants. After being net sellers of over ₹1.6 lakh crore in Indian equities, experts believe FPIs are likely to return as buyers, driven by India's macroeconomic stability and attractive valuations.
Ponmudi R, CEO of Enrich Money, noted that Indian equity markets are positioned to begin the second trading session of 2026 on a cautiously positive and stable note. With international markets reopening gradually, overseas cues remain limited, keeping early trading largely influenced by domestic factors.
Earnings Season Expectations
As the Q3 earnings season approaches, investors are strategically positioning for resilient results, particularly in consumer-oriented sectors. The positioning is supported by:
- GST rationalization tailwinds
- Robust festive-season demand
- Steady domestic institutional inflows
- Continued support offsetting aggressive foreign investor selling
Most Asia-Pacific markets remain closed, though Korea's Kospi showed marginal gains in early trading. The focus on domestic factors and upcoming earnings results is expected to drive market direction in the near term, with analysts suggesting the next few months will provide clearer indications of normalized monthly GST collection patterns following the rate adjustments.
15
