Massive send-of to Houston-bound PM Modi by markets

Mumbai: Indian markets never had it so good in a decade. Rising to the occasion – almost going through the roof -- they gave a thundering response to the corporate tax cut announced by the government; this enthusiasm was clearly missing when Finance Minister Nirmala Sitharaman recently announced a series of ‘booster stimuli’ to perk up the economy.

The benchmark Sensex gained over 1,921 points on Friday in what was the biggest ever single-day jump in over 10 years. The Nifty followed suit as the government finally made up for a depressing budget in July that cost millions in FPI money outflows.

Top percentage gainers on the 50-scrip index were Eicher Motors, Hero Moto- Corp, IndusInd Bank, Bajaj Finance, Maruti Suzuki  & State Bank of India (SBI), each registering a double-digit percentage jump of between 10.11 per cent and 13.38 per cent. 

HDFC Bank, Reliance Industries, ICICI Bank and Kotak Bank were the top contributors to the surge in Sensex. 

The Nifty Auto sectoral index - comprising shares in manufacturers of cars, motorcycles, heavy vehicles, auto ancillaries etc. - ended 9.90 per cent higher. All 15 stocks on the index finished higher, gaining 4.50 per cent and 19.35 per cent.

Experts said that market gains would certainly not be restricted to the spurt witnessed on Friday. Rather, the "animal spirits" would be back and investors who had waited on the sidelines, two months post-Budget, would be rewarded.

Amit Gupta of TradingBells said the Indian markets are now in line with Asian peers like China and Indonesia in terms of corporate tax rates. This is "surely going to catch the eyes of many FPIs and FIIs, and we can see the inflows surging in the coming week".

Gupta advised investors to focus on various corporates which are currently paying over 25 per cent taxes such as State Bank of India, United Spirits, Tata Steel, ONGC, Mahindra & Mahindra, among others.

"These and many other scrips registered gains of 4 per cent to 10 per cent in trade today (Friday) and could see further upside as the spin-offs of lower taxation materialise," he added.

Vinod Nair, Head of Research, Geojit Financial Services, said: "The corporate tax reform is music to the investors' ears and will help revive economic outlook in the coming quarters.

"Nair also said that "FIIs now have a good reason to come back to India and this progressive step will stimulate consumption and ignite the capex cycle. Additionally, companies will get more elbow room to pass on benefits to customers which, in turn, will improve earnings visibility."

BY RAVI DUTTA MISHRA

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