Sensex, Nifty extend rally; IT stocks cap gains

Indian shares jumped nearly 3% on Monday, extending sharp gains from the previous session as a surprise move by the government last week to cut the effective corporate tax rate stoked optimism among investors concerned about a slowing economy.

The broader NSE Nifty closed 2.89% higher at 11,600.20, while the benchmark BSE Sensex ended up 2.83% at 39,098.03. Both indexes closed at their highest levels in more than two months.

They recorded their best day in more than a decade on Friday after Finance Minister Nirmala Sitharaman cut the effective corporate tax rate to around 25% from 30% and scrapped the minimum alternative tax for domestic companies.

On Monday, banking and consumer stocks led the gains. The Nifty banking index, which tracks both state-owned and private-sector lenders, finished 5.41% higher, while the FMCG index closed up 4.31%.

Bharat Petroleum Corp touched its highest level since March last year and topped the list of gainers among blue chips.

However, IT stocks put the brakes on the rally, with the index closing down 2.91% after recording its worst intraday day drop in over two-and-a-half years.

IT heavyweight Infosys ended nearly 5% lower and was one of the biggest losers among the NSE stocks.