GST rationalization: You don't become irrational; 10 stocks, from two sectors, some may get more, some less, some nothing

Stocks of some consumer-facing sectors have rallied in the past three days. The reason: A coming cut in GST rates will spur demand. On the face of it, there is nothing wrong with this assumption. The laws of economics say that lower taxes mean lower prices and lower prices mean higher demand. However, take the case of air-conditioners. If prices are cut next month, it does not mean an immediate demand spurt. Yes, it may have an impact by next summer. But if the summer is late and mild like this year, demand will be impacted. So, the impact of any GST rate cut comes with many ifs and buts. Similarly, there are sectors where the response needs to be rational rather than emotional. More than anything else, demand elasticity is the big factor when looking at GST.