Key equity benchmarks were trading in a narrow range near the day's high in the afternoon trade. At 13:25 IST, the barometer index, the S&P BSE Sensex surged 1,168.85 points or 3.07% at 39,183.47. The Nifty 50 index also soared 336.75 points or 2.99% at 11,610.95.
Broader market was buoyant. The S&P BSE Mid-Cap index was up 3.12%. The S&P BSE Small-Cap index rose 2.61%.
The market breadth was strong. On the BSE, shares 1,600 rose and 858 shares fell. A total of 173 shares were unchanged.
The domestic stock market added to the historic gains made on Friday after Finance Minister Nirmala Sitharaman delivered a surprise cut in corporate tax rates. The surprise decision by the government is seen boosting corporate earnings significantly.
FM on Friday, 20 September, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge will stand at 25.17%. To further attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15%. The government will give MAT relief for those opting to continue paying surcharge and cess at 22%. MAT has been reduced to 15% from 18.5% for companies who continue to avail exemptions and incentives. The step has significant positive implications for corporates' profitability, broader economy and market valuations.
On the political front, Prime Minister Narendra Modi and US President Donald Trump exchanged warm words of friendship in Texas at a rare mass rally for a foreign leader. Around 50,000 people gathered on Sunday, 22 September 2019, in Houston for the "Howdy, Modi!" event, which was billed as one of the largest ever receptions of a foreign leader in the US.
In his speech, Modi said India has a "true friend" in the White House, describing Trump as "warm, friendly, accessible, energetic and full of wit". Meanwhile, Trump used his speech to heap praise on Modi, who he said was doing a "truly exceptional job for India" and its people.
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Overseas, European stocks were mixed as investors reacted to the collapse of one of the world's most well-known British tour operator Thomas Cook. It was unable to secure a rescue package from its lenders. CEO Peter Fankhauser has cited deep regret to its customers and staff.
Meanwhile, investors looked forward to the Purchasing Managers' Index (PMI) data for both France and Germany, to be announced today morning, 23 September 2019.
Asian shares are trading mixed on Monday on hopes of an interim Sino-US tariff deal after the two countries described their talks as productive and constructive.
U.S. stocks closed lower Friday, as investors looked beyond a litany of central-bank decisions of the past week and focused on the state of China-U.S. trade talks.
On the equity front back home, IndusInd Bank (up 8.13%), Bajaj Finance (up 7.62%), Asian Paints (up 7.57%), Bajaj Finserv (up 7.49%) and BPCL (up 7.01%) advanced.
Zee Entertainment Enterprise (down 7.22%), Infosys (down 4.64%), Wipro (down 3.01%), Tata Motors (down 3%) and PowerGrid Corporation of India (down 2.75%) declined.
Cipla shed 2.77%. The drug major informed that following the inspection by the United States Food and Drug Administration (USFDA) at the company's API manufacturing facility in Virgonagar, Bengaluru, from 15 to 19 July 2019, it has received the Establishment Inspection Report (EIR), indicating closure of the inspection. The announcement was made yesterday, 22 September 2019.
Dr Reddy's Laboratories fell 3.38% to Rs 2733 after media reports suggested that the company has halted worldwide supply of Ranitidine until the outcome of a US FDA investigation becomes available. Ranitidine is an over-the-counter (OTC) and prescription drug which decreases the amount of acid created by the stomach. As per reports, the drug maker has suspended supply of its drug ranitidine worldwide as a precautionary measure, following the ongoing probe by the US Food and Drug Administration into the reported impurity N-nitrosodimethylamine in it at low levels. The reports said that the FDA in a statement on September 13 had said it is working with international regulators and industry partners to determine the source of this impurity in ranitidine and examining levels of NDMA in ranitidine and evaluating any possible risk to patients. The FDA has been investigating NDMA and other nitrosamine impurities in blood pressure and heart failure medicines such as Valsartan since last year, the reports added.
Larsen & Toubro (L&T) advanced 8.60% after it said that the smart world and communication (SW&C) and power transmission & distribution (PT&D) businesses of L&T Construction jointly commenced executing one of the largest communication network in India for Telangana Fibre Grid Corporation. The announcement was made during market hours today, 23 September 2019.
The order falls under "significant" category which ranges between Rs 1,000 crore and Rs 2,500 crore as per its classification of contracts.
Adani Ports & Special Economic Zone surges 6.90% on reports that its committee of creditors has approved the resolution plan of taking over the cash-strapped Dighi Port under the bankruptcy and insolvency law.
HDFC Bank jumped 5.64%. Shares of HDFC Bank soared 15.88% in three trading sessions to its current market price of Rs 1,267.20, from a recent closing low of Rs 1,093.48 on 18 September 2019. The stock hit an intraday high of Rs 1285, which is also a 52-week high for the counter.
As on 31 March 2019, HDFC Bank paid corporate tax of 34.54%.
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