It reclaimed the 39,000-mark in the early session driven by gains in HDFC Bank, ITC, L&T and ICICI Bank.
After hitting a high of 39,346.01 points, the 30-share index was trading 1,031.58 points, or 2.71 per cent, higher at 39,046.20 at 9.30 am, while Nifty jumped 263.75 points, or 2.23 per cent, to 11,537.95.
Following the government’s announcement of a surprise cut in corporate tax rates to revive the sagging economy on Friday, the BSE barometer roared back into action with the Sensex posting its biggest single-day jump in over 10 years at 1,921 points, while the NSE Nifty zoomed 569.40 points or 5.32 per cent to close at 11,274.20.
Soon after Finance Minister Nirmala Sitharaman slashed the base corporate tax for existing companies to 22 per cent from 30 per cent and for new manufacturing firms — incorporated after October 1, 2019 — to 15 per cent from 25 per cent, investors, who were increasingly getting worried over the slowdown in the economy, cheered the announcements and came back with a bang with big purchase orders and covered their short positions.
Market continued to soar on Monday as sentiment investor remained elated in opening session, the traders said. According to Shibani Kurian, Senior Vice President and Head of Equity Research, Kotak Mahindra AMC, the cut in corporate tax rate is a huge boost to the overall profitability of corporate India.
“This step along with some of the other measures announced including that the enhanced tax surcharge introduced in July 2019 shall not apply to capital gains on sale of equity share which is subject to securities transactions tax would go a big way in restoring confidence in the Indian equity markets,” PTI quoted her as saying.
Rupee slips 9 paise to 71.03 against USD
Meanwhile, rising crude oil prices and concerns regarding US-China trade war kept investors edgy made the rupee open at 71.03, which is 9 paise lower than its last close, against the US dollar on Monday. Forex traders said reports that the US is likely to mount pressure on China by raising existing tariffs if the two countries fail to reach a trade deal soon.
The rupee however recovered from the initial loss and was trading at 70.94 against the US dollar at 10.12 am. Brent crude futures, the global oil benchmark, rose 1.04 per cent to USD 64.95 per barrel. The domestic currency had settled at 70.94 against the US dollar on Friday.