Indian shares climb on GST boost; Sensex firm above 31,000

Shares in fertilizer companies gained after the government fixed the GST rate on fertilizer at 5 percent.

india trader
A trader works at a stock brokerage in the western Indian city of Ahmedabad. REUTERS

Indian shares surged on Monday, largely ignoring the somber sentiment in other Asian markets, led by gains in ITC and Maruti Suzuki as the nation adopted a new tax regime under the goods and services tax (GST).

At 0708 GMT, the benchmark S&P BSE Sensex rose 1.1 percent at 31,233 while the Nifty advanced 0.97 percent at 9,613.

India embraced a new tax reform known as GST, which seeks to bring in transparency and efficiency and was welcomed as positive for India's sovereign credit profile by rating agency Moody's Investors Service.

Sentiment across Asia was muted at the start of the holiday shortened week in the U.S.

The MSCI Asia Pacific Index was little changed after the gauge finished the second quarter with a gain of 5.2 percent.

Back home, shares in fertilizer companies gained after the government fixed the GST rate on fertilizer at 5 percent instead of 12 percent decided earlier.

Nagarjuna Fertilizers and Gujarat State Fertilizers climbed 4 percent each, National Fertilizers advanced 3 percent while Zuari Agro Chemicals gained 1.3 percent.

Fast moving consumer goods, discretionary goods, metal and auto indexes were the top performer.

Biscuit maker ITC jumped 6 percent while cigarette maker Godfrey Phillips climbed 3 percent.

Among the miners, shares of Hindalco Industries, Jindal Steel and NMDC gained between 2.8 to 3 percent.

Carmaker Maruti Suzuki rose 1.3 percent after its passenger vehicles sales in June in the domestic market rose marginally 1 percent to 93,057 units over a year ago period.

Market breadth was in the favour of gainers, with about 3 stocks advancing to every 1 stock that declined.