Nifty Midcap100 posts biggest gain in 10 yrs, spikes over 5%; PAGE Industries, RBL Bank jump the most

The Nifty posted biggest single-day gain in a decade and the Sensex zoomed 1,900 points on September 20 after Finance Minister Nirmala Sitharaman announced a cut in corporate tax and several other measures to boost the economy.

Addressing a press conference, Sitharaman announced a cut in the corporate tax rate for domestic companies and new domestic manufacturing companies.

The new provision in the Income Tax Act, which will allow domestic companies to pay the tax at the rate of 22 percent, will be effective from FY19-20 subject to the condition they don’t not avail any incentive or exemptions.

The revenue foregone by the reductions and the other measures would be Rs 1.45 lakh crore per year, the Finance Minister said.

All sectoral indices were trading in the green, with Nifty the Midcap50 outshining all others. The midcap index saw biggest one-day gain in history. The Nifty100 index made its biggest gain in the last 10 years.

The top gainers from the midcap space, included ICICI Securities. which spiked 12 percent, followed by RBL Bank, PAGE Industries, Sun TV Network, TVS Motor Company, Havells India, M&M Financial Services and ABB among others.

"In a major boost to revive flagging animal spirits & position India as one of the most attractive business destinations, government of India has announced a slew of measures that would act as a force multiplier for the flagging economic engine," said Ajay Bodke, CEO PMS at Prabhudas Lilladher

By slashing corporate tax rate to 25% from 35 % (22% from 30% without exemptions) for domestic companies and extremely attractive rate of 15% for new companies setting up manufacturing operations after October 1, 2019, and commencing operations before 2023, government has rolled out a red carpet that would ensure hundreds of billions of dollars of FDI & FII flows over the medium term, he added.