Sensex, Nifty Spurt 5.3% As Government Announces Tax Cut

Indian shares soared on Friday on uninterrupted buying after Finance Minister Nirmala Sitharaman announced the government’s decision to slash effective corporate tax.

The benchmark BSE Sensex ended up 1,921 points, or 5.32%, at 38,014.62, after scaling a high of 38,378.02 intraday.

The National Stock Exchange’s Nifty50, which rallied to 11,381.90, ended with a gain of 569.40 points, or 5.32%, at 11,274.20.

Automobile stocks were the biggest gaines. The BSE Auto index moved up as much as 9.85%. Among the other major gainers shares from consumer discretionary, materials, oil, banking, consumer durables and capital goods sectors.

Realty, healthcare and telecommunications stocks too ended on an upbeat note.

The market breadth was quite strong with as many as 1846 stocks moving higher on BSE. 728 stocks declined and 144 stocks ended flat.

Automobile majors Hero Motocorp, Maruti Suzuki, Mahindra & Mahindra, Tata Motors and Bajaj Auto gained 7 to 12.5%.

Ashok Leyland gained nearly 19%, while TVS Motor and Eicher Motors both ended stronger by about 13.3%.

Index heavyweights Reliance Industries and HDFC Bank gained 6.4% and 9%, respectively.

State Bank of India, ICICI Bank, Hindustan Unilever, Larsen & Toubro, Tata Steel, IndusInd Bank, Axis Bank, Asian Paints, ONGC, IndusInd Bank and Bajaj Finance ended stronger by 6 to 11%.

The finance minister said that corporate tax will be cut to 25.17% inclusive off all cess and surcharges for domestic companies and that the new tax rate will be applicable from the current fiscal which began on April 1.

Other positives for the market today came about through announcements that the government will not levy enhanced surcharge introduced in the Budget on capital gain arising from sale of equity shares in a company liable for securities transaction tax and that the super-rich tax will not apply on capital gains arising from sale of any security including derivatives in hands of foreign portfolio investors.

Except for shares from information technology sector, it turned out to be a grand outing for stocks in the Indian market on Friday.