Mumbai, Aug 18 (PTI) Benchmark indices Sensex and Nifty surged in early trade on Monday, buoyed by plans for big bang reforms in the GST regime by Diwali and S&P upgrading India's sovereign credit rating.

Auto, consumer discretionary and consumer durables stocks propelled the rally in the equity market.

The 30-share BSE Sensex jumped 1,021.93 points to 81,619.59 in early trade. The 50-share NSE Nifty surged 322.2 points to 24,953.50.

From the Sensex firms, Maruti, Bajaj Finance, Mahindra & Mahindra, UltraTech Cement, Trent and Bajaj Finserv were among the major gainers.

However, Larsen & Toubro, ITC, HCL Technologies and Infosys were the laggards.

"There are strong tailwinds for the market with potential to take it higher. Declarations by the prime minister on the next major reforms in GST by Diwali are a big positive. S&P upgrading India’s sovereign credit rating is another major positive," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Prime Minister Narendra Modi on Sunday said the Centre has circulated the draft of the next-generation GST reforms among states and sought their cooperation to implement the proposal before Diwali.

Modi had announced the proposal to reform the GST law in his Independence Day speech on August 15 from the ramparts of the Red Fort.

"The expectation is that most of the goods and services will be in the 5 per cent and 18 per cent tax slabs. Sectors like autos and cement, which are presently in the 28 per cent tax slabs, are expected to benefit. TVS Motors, Hero, Eicher, M&M and Maruti are likely to respond positively to the news. Insurance companies are also expected to benefit from the GST revision," Vijayakumar added.

In Asian markets, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng traded in positive territory while South Korea's Kospi quoted lower.

The US markets ended mostly lower on Friday.

Global oil benchmark Brent crude dipped 0.05 per cent to USD 65.82 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,926.76 crore on Thursday, according to exchange data.

On Thursday, the Sensex climbed 57.75 points or 0.07 per cent to settle at 80,597.66. The Nifty rose by 11.95 points or 0.05 per cent to 24,631.30.

Equity markets were closed on Friday for Independence Day. PTI SUM SUM DR DR

GST reform boosts investor sentiment as draft proposes tax-slab consolidation, prompting equity markets to rally. Proposed comprehensive GST reform circulated to states for implementation before Diwali would consolidate most goods and services into lower standard rates, moving large portions of the tax base into 5 per cent and 18 per cent slabs; sectors currently in higher slabs, such as autos, cement and insurance, are expected to benefit, and these regulatory expectations have directly driven equity market gains and sectoral valuation shifts.