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Business

Sensex zooms 1,075 points to reclaim 39,000-mark

The S&P BSE Sensex and NSE Nifty 50 indices skyrocketed for second straight session after the investor sentiment got a boost from corporate tax rate cuts announced by Finance Minister Nirmala Sitharaman on Friday. The Sensex surged as much as 1,426 points to close above 39,000 mark for the first time since July 17 and the Nifty advanced close 11,700 mark. Rally in banking and fast moving consumer goods shares supported the upmove in today’s session. HDFC twins, ICICI Bank, Larsen & Toubro, ITC and Kotak Mahindra Bank were among the top Sensex movers and contributed over 800 points towards upmove in the Sensex.

The Sensex surged 1,075 points or 2.83 per cent to close at 39,090 and Nifty 50 index rose 329 points or 2.92 per cent to end at 11,603. Today’s upmove comes a day after the Sensex and Nifty surged the most in over 10 years on Friday following announcement of corporate tax rate cut.

“A mega bull market is starting now on the back of the reforms of the century for India… I don’t think we will be looking back anytime soon,” AK Prabhakar, head of research at IDBI Capital, told NDTV.

Nine of 11 sector gauges compiled by National Stock Exchange ended higher led by the Nifty Private Bank index’s 5.6 per cent gain. Nifty FMCG, Nifty Financial Services, Nifty Bank, Nifty Auto, NIfty PSU Bank and Nifty Realty indexes also rose between 2 and 5.4 per cent each.

On the other hand, Nifty IT index dropped nearly 3 per cent after Infosys and Tata Consultancy Services came under selling pressure.

Mid- and small-cap shares also witnessed buying interest in today’s session as the Nifty Midcap 100 rose 2.45 per cent and the Nifty Smallcap 100 index climbed 3.14 per cent.

Bharat Petroleum was top gainer in the Nifty 50 basket of shares, the stock rose 14 per cent to close at Rs. 459. Larsen & Toubro, Bajaj Finance, Eicher Motors, Indian Oil, Asian Paints, Adani Ports, Bajaj Finserv, Axis Bank, Kotak Mahindra Bank and ITC were also among the gainers up between 7 and 9 per cent each.

On the flipside, Zee Entertainment, Infosys, Power Grid, Tata Motors, Dr Reddy’s Labs, Cipla and NTPC were among the laggards.

The overall market breadth was positive as 1,197 shares closed higher while 622 closed lower on the NSE.

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Business

Investors Become Richer By Nearly Rs. 7 Lakh Crore In A Single Day On Corporate Tax Annoucement

Investor wealth on Friday zoomed a whopping Rs. 6.82 lakh crore in single day as equity markets rallied, with the Sensex skyrocketing 2,284 points in intra-day trade, following a slew of economy-boosting measures announced by Finance Minister Nirmala Sitharaman. The 30-share key BSE index zoomed 1,921.15 points or 5.32 per cent to close at 38,014.62. During the day, it advanced 2,284.55 points to 38,378.02, its biggest intra-day spike in over a decade. The bull market led the market capitalisation of the BSE-listed companies to soar Rs. 6,82,938.6 crore to Rs. 1,45,37,378.01 crore in single day.

The government on Friday slashed the corporate tax rate for companies by almost 10 percentage points to 25.2 per cent and offered a lower rate to 17.01 per cent for new manufacturing firms to boost economic growth rate.

In the fourth phase of post-budget economic stimulus measures, Ms Sitharaman cut base corporate tax for existing companies to 22 per cent from the current 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019, and starting operations before March 31, 2023, to 15 per cent from the current 25 per cent.

Ms Sitharaman also said no tax will be charged on share buyback by listed companies that announced such a move prior to July 5. Also, super-rich tax by way of enhanced surcharge on income, announced in the July 5 Budget, will not apply to capital gains arising on equity sale or equity-oriented funds liable to securities transaction tax (STT) with a view to stabilise flow of funds into capital markets.

“The biggest event of the week was the cut in corporate tax rates as announced by the finance minister. This is a huge step in boosting the overall profitability of corporate India. “This step, along with some other measures announced including the enhanced tax surcharge introduced in July 2019 to not apply to capital gains on sale of equity share which is subject to STT, would go a big way in restoring confidence in the Indian equity markets,” said Shibani Kurian, senior vice-president and head of equity research, Kotak Mahindra Asset Management Company.

Religare Broking Vice-President (Research) Ajit Mishra said it turned out to be a historic session for equity markets as Nifty gained over 5 per cent. Participants rejoiced the announcements made by the finance minister to boost the economy and market sentiments, wherein the cut in corporate tax turned out to be the catalyst.

The announcements came just in time as markets were reeling under tremendous pressure, citing weak domestic sentiments and not-so-encouraging global markets, Mr Mishra added. From the BSE 30-share basket, 25 scrips closed with hefty gains led by Hero MotoCorp, Maruti Suzuki India, IndusInd Bank, Bajaj Finance, State Bank of India and Mahindra & Mahindra and zoomed up to 12.52 per cent.

On the BSE, 1,864 scrips advanced, while 728 declined and 144 remained unchanged. Sectorally, the BSE auto, bankex, capital goods, consumer durables, finance, energy, oil and gas, metal and telecom indices rallied up to 9.85 per cent. In the broader market, the BSE Midcap and Smallcap indices also rose by up to 6.28 per cent.

The rupee too appreciated 66 paise to 70.68 against US dollar following the Finance Minister’s announcements.