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Last Updated : Sep 20, 2019 04:38 PM IST | Source: Moneycontrol.com

As pre-Diwali party begins on Dalal Street, 40 stocks in BSE500 close with gains of over 10%

Experts have termed the reduction in corporate tax and others measures as a pre-Diwali gift not only for the equity market but also for corporates, consumers and multinationals.

Sandip Das @Im_Sandip1

Indian market saw its best day in a decade after Finance Minister Nirmala Sitharaman on September 20 cut corporate tax, with the Sensex closing 1,921 points higher at 38,014 and the Nifty zooming 11,274, up more than 5 percent.

At a press conference, Sitharaman announced a string of measures to boost the sagging economy, the fourth such attempt by the minister in recent time to lift growth in Asia’s third largest economy.

The new provision in the Income Tax Act, which will allow domestic companies to pay income tax at the rate of 22 percent provided these companies do not avail any incentive or exemption. The tax cuts and other measures will cost the exchequer Rs 1.45 lakh crore per year, the minister said.

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Investors got richer by Rs 6,27,618 crore after the Sensex added nearly 2,000 points and the Nifty gained more than 560 points. Experts termed the announcements as a pre-Diwali gift not only for the equity market but also corporates, consumers and multinationals.

"The government has rolled out a red carpet that would ensure hundreds of billions of dollars of FDI & FII flows over the medium term," Ajay Bodke, CEO PMS Prabhudas Lilladher, told Moneycontrol.

The broader markets also traded in line with frontliners, as the Nifty Midcap index was up 5 percent and Smallcap index gained 4 percent amid strong breadth. About four shares advanced for every share falling on the NSE.

All sectoral indices, baring IT, closed in the green, with the Nifty Auto outshining others, closing the day with gains of close to 10 percent.

The Bank Nifty was up over 8 percent, followed by midcaps, which posted their clocked their performance in 10 years. The Nifty Energy, FMCG, infra and metal sectors added 5-6 percent.

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The largecap and midcap stocks that ended the day with gains of more than 10 percent include Edelweiss Financial Services and Ashok Leyland, which zoomed 18 percent each, followed by ICICI Securities (up 17 percent), NCC, Bombay Burmah, PAGE Industries, RBL Bank, TSV Motor, Eicher Motors, PNB Housing, Hero Moto, Havells India, Ambuja Cements, MRF, Jubilant Food, IndusInd Bank, Maruti and State Bank of India.

Emkay Global, IRB Infra, Tasty Bite and V2 Retail were among the smallcap stocks which were up more than 10 percent.

The measures announced by Sitharaman to reboot India would certainly turn the tide for the economy and the markets, said Nirmal Jain, chairman, IIFL Group. It was also a move towards simpler low tax regime, with no or minimal incentives exemptions, Jain added.

The decision to cut corporate tax credit was positive, which would likely boost Indian companies’ net income, Moody's said in a report.

Market had turned upward for a longer time and a classic bottoming out formation was seen on all time frames and would see the levels of 11,600. Buying was

advisable at current levels and more on declines at around 11,100/11,000, which would be a major support area, said Shrikant S Chouhan, Senior Vice- President, Equity Technical Research at Kotak Securities.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Sep 20, 2019 04:38 pm
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