BIG GAINS AHEAD? India Stocks Set for Positive Start as GST Data & FPIs Spark Hope!

Indian equity markets are poised for a positive opening on Friday, with the Gift Nifty futures trading in the green, signalling a potential gap-up of around 40 points. This optimistic start is underpinned by recent macroeconomic data releases and expectations surrounding foreign investor flows. Analysts anticipate trading volumes might remain subdued, leading to lacklustre market activity in early trades.

The Goods and Services Tax (GST) collections for December 2025 provided a mixed picture. Total receipts stood at approximately ₹1.75 lakh crore, marking a 6.1 percent improvement compared to the previous year. This figure reflects underlying economic resilience.
However, the net domestic collection under GST saw a decline of over 5 percent in December. This dip is largely attributed to a significant increase in the issuance of refunds to businesses, according to data available on the GST portal.
Karthik Mani, Partner, Indirect Tax at BDO India, commented that while GST collections on imports rose, they were insufficient to offset the shortfall in domestic collections, which was exacerbated by higher refunds and a slight decrease in gross GST collections from domestic transactions. He noted that gross domestic collections remained largely flat year-on-year despite recent rate cuts in September 2025, suggesting some underlying improvement in economic activity. Mani expects the next few months to provide a clearer indication of normalized monthly GST collections post-adjustments for rate changes.

A significant factor keenly watched by the market is the potential return of Foreign Portfolio Investors (FPIs) as net buyers. FPIs have been net sellers, divesting over ₹1.6 lakh crore in Indian equities recently. Despite this outflow, experts remain optimistic about their eventual return, citing India's strong macroeconomic stability as a key attraction.

Several stocks are expected to be in the spotlight on Friday's trading session. These include Devyani International, Sapphire Foods, NLC India, Vodafone Idea, and Britannia Industries. Investors will be closely monitoring their performance and any associated news.

Ponmudi R, CEO of Enrich Money, shared insights suggesting that Indian equity markets are set to commence the second trading session of 2026 on a cautiously positive and stable note. With international markets gradually reopening, overseas cues are limited, placing the onus on domestic factors to drive early trading.
As the crucial third-quarter earnings season approaches, investors are strategically positioning themselves for potentially resilient results, particularly in consumer-oriented sectors. This optimism is supported by the positive effects of GST rationalization and robust festive-season demand witnessed previously. Steady domestic institutional inflows continue to provide essential support, effectively counterbalancing the aggressive selling pressure exerted by foreign investors.

As a potential trading opportunity, Sunteck Realty is recommended as a BUY, with a target price indicated around ₹428.60.

While most markets across the Asia-Pacific region are observing holidays, Korea’s Kospi showed marginal gains in early trading, providing a slight positive offshore sentiment.

The anticipated positive market opening could bolster investor confidence, particularly benefiting consumer discretionary and real estate sectors mentioned. A sustained return of FPIs would be a significant positive catalyst. The trend in GST refunds and their impact on net collections will be a point to monitor for fiscal health indicators. Overall, the news suggests a cautiously optimistic short-term outlook for Indian equities.

Foreign Portfolio Investors (FPIs): Investors from foreign countries who invest in Indian financial markets, such as stocks and bonds.
Goods and Services Tax (GST): A comprehensive indirect tax levied on the supply of goods and services across India.
Gift Nifty: An index representing the performance of the Nifty 50 companies traded on the Singapore Exchange, often seen as a pre-opening indicator for the Indian market.
Macroeconomic Stability: A state where a country's economy is characterized by low inflation, stable growth, and manageable debt levels, making it attractive for investment.
Net Domestic Collection: The amount of tax revenue collected from domestic transactions after accounting for adjustments like refunds.
Refunds: Money paid back to taxpayers (businesses or individuals) when they have overpaid taxes or are eligible for deductions.