Mumbai: With expectations that the government's move to rationalise the corporate tax structure will kickstart the next big economic upcycle, stock markets are rallying on Friday. At 1:35 pm, the Sensex is at 38,026.01, up 1932.54 points, or 5.35%, while the Nifty is at 11,276.55, up 571.75 points, or 5.34%.
The BSE Midcap index rose 5.41%, while the BSE Smallcap index jumped 3.32%. The BSE 500 index was also up 4.91%.
Among BSE 500 stocks, 11 stocks gained over 10% intra-day. Among gainers, Ashok Leyland, ABN India Ltd, Eicher Motors Ltd, Blue Star Ltd, Thermax Ltd, Varroc Engineering Ltd, RBL Bank Ltd, Havells India Ltd, Page Industries Ltd, Jamna Auto Industries Ltd and Maruti Suzuki India Ltd jumped 10-14% intra-day on Friday.
Among BSE 500 stocks, 39 were down. These stocks include PTC India Ltd, Coffee Day Enterprises Ltd, Zee Entertainment Enterprises Ltd and Dish TV India Ltd among others.
Sunil Sharma, chief investment officer, Sanctum Wealth Management said this was a much-needed measure, and clearly demonstrated the government’s commitment to rejuvenate domestic growth. “With fiscal and monetary forces working in tandem, and meaningful big bang reforms being announced, alongside monetary easing, we believe the pervasive negative sentiment that exists today has bottomed and will begin to revive. The markets will also deliver a positive wealth effect. The move in the markets will also deliver a positive wealth effect and will spur further financialisation, and engender efficient capital allocation," he added.
According to Vishal Kampani, managing director, JM Financial Group, the new tax rates will help boost corporate earnings during the current fiscal, which will lead to the revival of the consumption story. “The government has already ensured adequate liquidity to NBFCs, HFCs. These steps will facilitate higher economic expansion which will lead to higher tax revenue to meet its fiscal targets. The fiscal stimulus combined with the likely wealth effect from a buoyant stock market will take India closer to its dream of a $5 trillion economy," he added.