Mumbai, Sep 20 (IANS) As Indian stock markets surged to decade-high gains on Friday following Finance Minister Nirmala Sitharaman’s announcement of corporate tax rate cut among other measures, Hero MotoCorp and Maruti Suzuki India were the best performing stocks on the Sensex.
Stocks of two-wheeler major Hero MotoCorp settled 13.19 per cent or Rs 334.05 higher at Rs 2,866.50 per share.
Earlier in the day it surged 19 per cent to touch an intra-day high of Rs 3,015.60 per share.
Shares of Maruti Suzuki India which surged by 18.6 per cent during the intra-day trade, settled at Rs 6,585.25 per share, higher by Rs 646.95 or 10.89 per cent from the previous close.
Among the the other major gainers on the Sensex were IndusInd Bank, which closed 10.74 per cent higher at Rs 1,419.60, Bajaj Finance (10.19 per cent higher at Rs 3,705.60), State Bank of India (10.09 per cent up at Rs 301.70).
Following the major announcements earlier in the day, Indian benchmark indices logged the biggest-ever gains in over 10 years as the government slashed the effective corporate tax rate to about 25 per cent from 30 per cent.
Sensex advanced by a massive 1921.15 points to 38,014.62 and the broader Nifty jumped to 11,275.45 after gaining 570.65 points or 5.33 per cent.
The only stocks which lost on the Sensex were PowerGrid, Infosys, Tata Consultancy Services, NTPC and Tech Mahindra
Sitharaman announced lowering of corporate tax rate on domestic companies to 22 per cent subject to such entity not availing any exemptions and incentives. Also, these companies will not be required to pay any Minimum Alternate Tax (MAT). Effective tax rate in this case would be 25.17 per cent, including cess and surcharge.
Further, the ‘super-rich’ tax will not apply on capital gains arising from the sale of any security, including derivatives in the hands of Foreign Portfolio Investors (FPI).
To provide relief to the listed companies which have already made a public announcement of buyback before July 5, 2019, the government announced that tax on buyback of shares in case of such companies shall not be charged.
These measures also boosted the investor sentiments in the market.
Commenting on the measures, Mustafa Nadeem, CEO, Epic Research said: “This is huge for the market. There were few announcements that were keeping sentiments in check as the Finance Minister was trying to boost market sentiments and improve the state of the economy by boosting exports, banks consolidation, recapitalisation and so on but reducing the corporate tax rate to 22 per cent or domestic players and 15 per cent for new entrants setting up manufacturing units is a big boost. It has two important effects.
“One the domestic environment which was sluggish due to slowdown is going to fade with lowered corporate taxes,” Nadeem said.