Barometers held firm near the day's high in early afternoon trade. FMCG stocks were in demand following corporate tax cut. The Nifty was trading near 11,650 mark. At 12:21 IST, the barometer index, the S&P BSE Sensex, was up 1259.37 points or 3.31% at 39,273.99. The Nifty 50 index was up 372.85 points or 3.31% at 11,647.05.
The S&P BSE Mid-Cap index was up 3.19%. The S&P BSE Small-Cap index was up 2.5%.
The market breadth were in favour of bulls. On the BSE, 1596 shares rose and 770 shares fell. A total of 154 shares were unchanged. On Nifty50 index, 35 stocks advanced while 15 stocks declined.
On the derivatives front, the NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 9.17% to 16.81. The Nifty September 2019 futures were trading at 11,615.40, a discount of 23.5 points compared with the spot at 11,638.9.
On the options front, the Nifty option chain for 26 September 2019 expiry showed maximum call open interest (OI) of 32.17 lakh contracts at the 11,600 strike price. Maximum put OI of 45.95 lakh contracts was seen at 11,000 strike price. The option chain indicates that Nifty will stay between 11,000 and 11,600 in September expiry.
FMCG stocks advanced following corporate tax cut. Procter & Gamble Hygiene & Health Care (up 8.97%), Britannia Industires (up 8.65%), ITC (up 8.31%), Colgate Palmolive (India) (up 6.68%), Hindustan Unilever (up 6.27%), GlaxoSmithkline Consumer Healthcare (up 5.7%), Jyothy Laboratories (up 3.64%), Nestle India (up 3.41%), Godrej Consumer Products (up 2.34%), Marico (up 2.18%), Bajaj Consumer Care (up 2.13%) and Tata Global Beverages (up 1.7%) surged higher.
The Nifty FMCG index was up 5.97% at 31,615.85. The Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.
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As on 31 March 2019, Hindustan Unilever (HUL) paid corporate tax of 30.44%. Nestle India paid corporate tax of 33.84%. Britannia Industries paid corporate tax of 34.61%. GlaxoSmithkline Consumer Healthcare paid corporate tax of 36.01%. Colgate-Palmolive (India) paid corporate tax of 34.98%.
Thyrocare Technologies slipped 3.38% to Rs 508.15 after the company informed that it will not sell shares of wholly owned subsidiary Nueclear Healthcare to A. Velumani, the promoter, chairman, MD and CEO. The company's board met on 21 September 2019 to discuss about the offer of Dr. A. Velumani, chairman, managing director & CEO to acquire the shareholding of Nueclear Healthcare, the wholly owned subsidiary. The Audit Committee, which discussed the matter prior to the Board Meeting, had reviewed the valuation reports received from Karvy Investor Services and noted the long gestation period of this business in terms of returns. The Committee also felt that accepting the offer of Dr. A. Velumani may result in dilution of his focus and time, which is not in the interest of the company. In view of the above, the Audit Committee had recommended that it is not expedient to accept the offer of Dr. A. Velumani at this juncture.
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