WION Web Team New Delhi
Sep 20, 2019, 11.07 AM
Domestic stock market indices today saw a great trading day with the benchmark BSE Sensex surging 1900 points after the government proposes to slash Corporate tax for domestic companies and new domestic companies.
At 12:10 pm, Sensex was trading at 38,034.09, up by 1,940.62 points or 5.38% while the Nifty was up by 536.55 points at 11,239.80.
Finance Minister Nirmala Sitharaman told a news conference that the effective corporate tax rate will be lowered to 25.75% from 30%, which she said would be at par with Asian peers.
The government also scrapped the minimum alternative tax for domestic companies.
The rupee rose as much as 0.9% to 70.68 against the dollar, its strongest level since Aug 9, while the yield on benchmark 10-year bond rose to 6.71% versus 6.57% in early trading.
Shares of top private-sector lender HDFC Bank Ltd, soared nearly 10% - their most in over six years, sending the Nifty Bank index up 6.7%.
"The markets have been asking for a big fiscal stimulus and the government has delivered," said Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai.
Corporate earnings may see an almost 12% jump in the next quarter for full tax-paying companies due to the cut, and the markets can go up nearly 10%, Oza said, adding that foreign investors would cheer these measures.
The Nifty Auto index jumped 7.9%, its sharpest intraday climb since July 2011, with Eicher Motors Ltd surging 24%.
(With inputs from agencies)
At 12:10 pm, Sensex was trading at 38,034.09, up by 1,940.62 points or 5.38% while the Nifty up by 561.40 points, currently at 11,266.20.