Key barometers further extended gains in the mid-afternoon trade. The Nifty seamlessly crossed 11,300 level. Barring IT stocks, heavy buying was witnessed across all sectors.
At 14:24 IST, the barometer index, the S&P BSE Sensex, surged 2,155.62 points or 5.97% at 38,249.10. The Nifty 50 index spurted 650.75 points or 6.08% at 11,355.55.
Investors are keenly awaiting outcome of the 37th meeting of the Goods and Services Tax (GST) Council, which is scheduled to take place later today in Goa.
The rally was broad based. The S&P BSE Mid-Cap index was up 5.84%. The S&P BSE Small-Cap index was up 3.89%. On the BSE, 1840 shares rose and 643 shares fell. A total of 155 shares were unchanged.
Bharat Forge surged 7.44% after the company announced that it acquired a 50% stake in Refu Electronik, a German company for 11.35 million euros.
Bharat Petroleum Corporation (up 14.71% ), Asian Paints (up 9.25%), Berger Paints (up 8.3%), Avenue Supermart (up 7.47%), Voltas (up 7.36%), Bata India (up 7.21%) , HDFC Life Insurance (up 5.92%), Colgate (up 5.49%), Credit Access Grameen (up 5.02%), HDFC Asset Management Company(up 4.77%) , Nestle (up 4.73%) and Interglobe Aviation (up 4.12%) hit 52-week high levels.
Strides Pharma Science rose 2.96% after the company announced that it has approved an additional investment up to $40 million in Stelis Biopharma for acquiring a controlling stake in the company. The investment will be done over the course of 24 months.
IT shares lagged the broader rally as rupee edged higher against the greenback. TCS (down 1.4%), Tech Mahindra (down 0.46%), Infosys (down 0.73%) and HCL Technologies (down 0.4%) declined.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.96, compared with its close of 71.34 during the previous trading session.
Meanwhile, the yield on 10-year benchmark federal paper rose to 6.791% at 14:25 IST compared with 6.634% at close in the previous trading session.
In the commodities market, Brent crude for November 2019 settlement was up 41 cents at $64.81 a barrel. The contract rose 1.26% to settle at $ 64.4 a barrel in the previous trading session.
MCX Gold futures for 4 October 2019 settlement fell 036% at Rs 37,550.
On the macro front, India's current account numbers for Q2 June 2019 will be announced later today, 20 September 2019. India's current account deficit narrowed sharply to $4.6 billion in January-March 2018-19 from $13 billion in the same period a year earlier.
In a press conference held in Goa today, the Finance Minister Nirmala Sitharaman announced a slew of measures in order to reduce the prevailing taxation rates in the country. The FM announced slashing of corporate tax rate for domestic companies and new domestic manufacturing companies. The FM added that the ordinance for cutting tax rate has been passed.
The FM said that the new corporate tax rate will be 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 FM added.
The government has also decided to not levy enhanced surcharge introduced in Budget on capital gain arising from sale of equity shares in a company liable for securities transaction tax (STT). To stabilise flow of funds into the capital market, enhanced surcharge under Finance (No.2) Act, 2019 will not apply on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for STT.
Higher surcharge will also not apply on capital gains on sale of security including derivatives held by foreign portfolio investors (FPIs). Listed companies that have announced buyback before 5 July 2019, tax on buyback of shares will not be charged.
Total revenue foregone for the reduction of taxes and other reliefs is estimated to be at Rs 1.45 lakh crore per year.
The government has decided to expand the scope of spending 2% profits on corporate social responsibility (CSR) to allow spending on incubators or research grants to institutes engaged in promoting science research.
FM also announced that effective tax for new companies shall be 17.01%, including cess and surcharge. Companies enjoying tax holidays would be able to avail concessional rates post the exemption period.
She further added that 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 said measures have been announced with expectation to widen the tax basked with lower tax rate. Economic buoyancy will itself generate revenue, the FM said.
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