Sensex surges over 2200 points after Finance Minister’s corporate tax cut announcement

The domestic stock markets indices Sensex and Nifty registered their biggest single-day gain in more than a decade after the government announced deep cuts in corporate taxes to revive flagging growth in Asia's third-largest economy.

At 2:00 pm, the Sensex was at 38,313.65, higher by 2,220.18 points from the previous close of 36,093.47 points.

The NSE Nifty50 was trading at 11,379.60, higher by 674.80 points from the previous close.

Finance Minister Nirmala Sitharaman said the effective corporate tax rate would be lowered to 25.17% from 30% and scrapped the minimum alternative tax for domestic companies.

"The reduction in corporate tax rate will "augur well for our economy," Reserve Bank of India chief Shaktikanta Das said, speaking at a conference in Mumbai.

The rupee rose as much as 0.9% to 70.68 against the dollar, its strongest level since Aug 9, while the yield on benchmark 10-year bond rose to 6.71% versus 6.57% in early trading.

Shares of top private-sector lender HDFC Bank Ltd, soared nearly 10% - their most in over six years, sending the Nifty Bank index up 6.7%.

Corporate earnings may see an almost 12% jump in the next quarter for full tax-paying companies due to the cut, and the markets can go up nearly 10%, Oza said, adding that foreign investors would cheer these measures.

The Nifty Auto index jumped 7.9%, its sharpest intraday climb since July 2011, with Eicher Motors Ltd surging 24%.

(With inputs from Reuters)