Investors become richer by nearly Rs 7 lakh cr in a day on FM’s tax booster

PTI

Mumbai: Stock prices displayed on a digital screen outside BSE building, in Mumbai, Friday, Sept. 20, 2019. Sensex surges 1,921.15 pts to end at 38,014.62; Nifty zooms past 11,200 after Finance Minister Nirmala Sitharaman announced a slew of measures to revive the ailing economy. (PTI Photo)

Mumbai: Stock prices displayed on a digital screen outside BSE building, in Mumbai, Friday, Sept. 20, 2019. Sensex surges 1,921.15 pts to end at 38,014.62; Nifty zooms past 11,200 after Finance Minister Nirmala Sitharaman announced a slew of measures to revive the ailing economy. (PTI Photo)

Investor wealth on Friday zoomed a whopping Rs 6.82 lakh crore in a single day as equity markets rallied, with the Sensex skyrocketing 2,284 points in intra-day trade, following a slew of economy-boosting measures announced by Finance Minister Nirmala Sitharaman.

The 30-share key BSE index zoomed 1,921.15 points or 5.32 per cent to close at 38,014.62. During the day, it advanced 2,284.55 points to 38,378.02, its biggest intra-day spike in over a decade.

The bull market led the market capitalisation of the BSE-listed companies to soar Rs 6,82,938.6 crore to Rs 1,45,37,378.01 crore in a single day.

The government on Friday slashed the corporate tax rate for companies by almost 10 percentage points to 25.17 per cent and offered a lower rate to 17.01 per cent for new manufacturing firms to boost the economic growth rate.

In the fourth phase of post-budget economic stimulus measures, Sitharaman cut base corporate tax for existing companies to 22 per cent from the current 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019, and starting operations before March 31, 2023, to 15 per cent from the current 25 per cent.

Sitharaman also said no tax will be charged on share buyback by listed companies that announced such a move prior to July 5.

Also, super-rich tax by way of enhanced surcharge on income, announced in the July 5 Budget, will not apply to capital gains arising on equity sale or equity-oriented funds liable to securities transaction tax (STT) with a view to stabilising the flow of funds into capital markets.

Religare Broking Ltd Vice-President (Research) Ajit Mishra said it turned out to be a historic session for equity markets as Nifty gained over 5 per cent. Participants rejoiced the announcements made by the finance minister to boost the economy and market sentiments, wherein the cut in corporate tax turned out to be the catalyst.

The announcements came just in time as markets were reeling under tremendous pressure, citing weak domestic sentiments and not-so-encouraging global markets, Mishra added.

From the BSE 30-share basket, 25 scrips closed with hefty gains led by Hero MotoCorp, Maruti Suzuki India, IndusInd Bank, Bajaj Finance, State Bank of India and Mahindra & Mahindra and zoomed up to 12.52 per cent.

On the BSE, 1,864 scrips advanced, while 728 declined and 144 remained unchanged.

Sectorally, the BSE auto, banks, capital goods, consumer durables, finance, energy, oil and gas, metal and telecom indices rallied up to 9.85 per cent.

In the broader market, the BSE Midcap and Smallcap indices also rose by up to 6.28 per cent.

(PTI)