Diwali fireworks on D Street

Hyderabad: Diwali, the festival of lights, is more than a month away.

But stock market celebrated Diwali in advance on Friday as Sensex, boosted by the surprise announcement of cut in corporate tax by the Centre, skyrocketed 1921 points, 5.32 per cent, to close at 38,014.62 points and Nifty scaled 569.40 points to end the historic day at 11,274.20 points.

Announcing the latest set of measures to jump-start flagging growth, Finance Minister Nirmala Sitharaman cut 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.

Bulls took over the market soon after the announcements. The 30-share BSE Sensex soared 2,284.55 points to a peak of 38,378.02 intra-day, before settling 1,921.15 points higher at 38,014.62.

The market capitalisation of BSE-listed companies jumped to Rs 145,37,378 crore, from Rs 138,54,439 crore on Thursday. Cash-market equity turnover on BSE and NSE nearly tripled to nearly Rs 90,000 crore, while derivatives turnover also zoomed to about Rs 2.4 lakh crore.

"The new corporate tax reforms by the government is music to the investors' ears and will help to revive economic outlook in the coming quarters.

FIIs now have a good reason to come back to India and this progressive step will stimulate consumption and ignite capex cycle.

Additionally, companies will get more elbow room to pass on benefits to customers, which in-turn will improve earnings visibility," said Vinod Nair, Head of Research, Geojit Financial Services.

Devang Mehta, Head - Equity Advisory, Centrum Wealth Management, said, "Today's measures, without exaggeration, have revived the sagging economic situation and has reinfused the 'Josh' amongst the corporate and capital market fraternity."

Sectorally, BSE auto, bankex, capital goods, consumer durables, finance, energy, oil and gas, metal and telecom indices rallied up to 9.85 per cent.

Only IT and teck closed in the red, losing up to 1.09 per cent. The broader BSE midcap and smallcap indices followed the benchmarks, surging up to 6.28 per cent. During the week, Sensex gained 629.63 points or 1.68 per cent, while the Nifty advanced 198.30 points or 1.79 per cent.

Meanwhile, the rupee strengthened 29 paise to 71.04 against US dollar intra-day. Brent crude futures, the global oil benchmark, rose 0.64 per cent to $64.84 per barrel.

On the global front, equities ticked higher amid optimism surrounding the US-China trade talks beginning next month.

In Asia, Shanghai Composite Index, Nikkei and Kospi ended on a positive note, while Hang Seng settled in the red.

(With inputs from PTI)