Mumbai / Sensex rise by 1,900 points after Finance Minister announced reduction in corporate tax

BSE Sensex rise over 1,900 points on Friday after Finance Minister Nirmala Sitharaman announced reduction in corporate tax.  Domestic equity benchmark BSE Sensex spiralled over 1,900 points in morning session on Friday after Finance Minister Nirmala Sitharaman announced a slew of measures to boost manufacturing and revive the ailing economy.

In a major booster to the market, the government has decided to not levy the enhanced surcharge introduced in the Budget on capital gain arising on sale of equity shares in a companies liable for securities transaction tax.

Also, the super-rich tax will not to apply on capital gains from sale of any security including derivatives in hands of foreign portfolio investors. In another relief, the minister said listed companies which have announced buyback of shares prior to July 5 will not be charged with super rich tax.

Today’s announcement was the latest in a series of measures announced by the government in the past few weeks to provide a fillip to growth that had fallen to six-year low of 5% in June quarter.

Soon after the announcement, the 30-share index zoomed 1904.06 points, or 5.28 per cent, to 37,997.53 at 12 noon, while the broader Nifty rose 362.95 points, or 3.39 per cent, to 11,067.75.

Top gainers in the Sensex pack included Maruti, M&M, HDFC Bank, Tata Motors, Yes Bank, Tata Steel, L&T, ICICI Bank, Bajaj Auto and RIL, rallying up to 9 per cent.

On the other hand, TCS and NTPC were trading in the red. The rupee too appreciated 66 paise to 70.68 against US dollar following the finance minister’s announcements.

Sitharaman, who has since her maiden Budget on July 5 announced measures in three tranches for boosting the economy, held a meeting with heads of public sector banks (PSBs) on Thursday to review liquidity or money flow in the system and transmission of lower benchmark interest rates to borrowers.

On the global front, resumption of trade talks between the US and China also buoyed market mood, traders said.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a positive note in their respective late morning sessions.

On Wall Street too, bourses too ended on a positive note on Thursday.

The rupee, meanwhile, appreciated 21 paise against its previous close at 71.12 in early session.

Global oil benchmark Brent crude rose 0.33 per cent to 64.61 per barrel (intra-day).

On Thursday, foreign portfolio investor sold shares worth a net of Rs 892.52 crore, while domestic institutional investors bought equities worth Rs 645.72 crore, provisional data showed.