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Updated September 4th 2025, 08:47 IST
Strong PMI, GST Cuts and Macro Tailwinds Could Drive Indian Markets to Record Highs Before Diwali: Ajay Bagga
With India’s manufacturing and services PMI hitting multi-year highs and composite PMI touching a 17-year peak, market expert Ajay Bagga says a cocktail of GDP strength, tax cuts, government spending, rural demand, and GST relief could fuel a pre-Diwali rally, potentially surpassing September 2024 highs.
August PMI for India:
1. Manufacturing PMI at an 18-year high
2. Services PMI at 15 15-year high
3. Composite PMI rose to a 17-year high of 63.2 in August, which indicated strong broad-based output growth in both the manufacturing and service sectors
The strong macro support of a multi-quarter high GDP, strong PMI readings meets the income tax cuts meets strong government expenditure meets strong rural demand backed by a robust monsoon meets underperforming markets with low expectations, meets on top of all of these tailwinds, a most timely GST cut that will boost consumption, formalisation and unleash festive cheer.
Indian markets are well-positioned for a pre-Diwali rally, and we may take out the September 2024 all-time highs on the back of all these positive triggers. If Trump drops the punitive 25% tariffs in addition, we may be setting up for a very remarkable Santa Claus rally for the Indian markets.
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Published September 4th 2025, 08:47 IST