Nifty registers biggest single-day gain in 10 years, as FM Nirmala Sitharaman announces major tax relief

Nifty registered its biggest single-day gain in ten years by crossing 11,000 and Sensex also rose past 1,900 points on September 20, 2019 minutes after Union Finance Minister Nirmala Sitharaman announced major tax relief for domestic and new domestic manufacturing firms to boost investment and growth.

Union Finance Minister Nirmala Sitharaman announced that the Government has proposed to slash corporate tax for domestic companies to 25.17 percent inclusive of cess and surcharges. The Government also decided to include a new provision in the Income Tax Act to allow new domestic manufacturing companies incorporated on or after October 1 to pay income tax at a rate of 15 percent. The tax rate effective for these companies will be 17.01 percent inclusive of all surcharge and cess.

The government also waived off enhanced surcharge on capital gains arising on sale of equity share in a company or a unit of an equity-oriented fund, to stabilise the flow of funds into the capital market.

Top Gainers

Top gainers in the stock market today included hotels and resorts, automobile companies, banks and manufacturing companies such as Yes Bank, Maruti, Tata Motors, M&M, Bajaj Auto, HDFC Bank, Tata Steel and L&T.

Among the automobile companies, stocks of Maruti Suzuki rose by 3.4%, Hero Motocorp Ltd by 3%, Tata Motors Ltd 2.2% and Mahindra & Mahindra by 2.6%.

Among the banks, the top gainers included HDFC Bank, Yes Bank and ICCI Bank. The stocks of Yes Bank surged by 6% after the lender assured investors that the bank’s financial position was stable.

Among the hotels, the stocks of Taj GVK Hotels and Resorts surged by 5%, Leela Venture jumped by 3.5%, Indian Hotels Company rose by 1.7%, EIH was up 0.7% and Lemon Tree chain of Hotels gained 0.8%.

Rupee gains also gained 66 paise to stand at 70.68 against US dollar following the finance minister's announcements.

Background

On September 17, 2019, the rupee had fallen to 71.97 against the US dollar. The day was also marked by heavy losses in the Indian market with Sensex falling by 704 points to 36,419.09 and Nifty slumping below 10,800, giving up all its gains of 2019.

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