Mumbai: Equity benchmark indices closed the week on a euphoric note on Friday after clocking the biggest intra-day gains in a decade at 5 per cent as the government announced a cut in the corporate tax rate for domestic companies and new manufacturing firms.
Finance Minister Nirmala Sitharaman slashed corporate taxes and announced a Rs 1.45 lakh crore stimulus to shore up growth and investments amid domestic and global economic growth, trade wars and volatile oil prices.
The development came ahead of a crucial meeting of the Goods and Services Tax (GST) Council on whether or not to cut rates for sectors like automobile, tourism, FMCG and others which have witnessed slowdown due to the economic slump.
At the closing bell, the BSE S&P Sensex was up by a whopping 1,921 points or 5.3 per cent at 38,015 while the Nifty 50 gained by 569 points to 11,274.
At the National Stock Exchange, all sectoral indices except for Nifty IT were in the green with Nifty auto up by 9.9 per cent, private bank by 8.2 per cent, financial service by 7.2 per cent and metal by 5.6 per cent.
Auto stocks accelerated with Eicher Motors gaining by 13.3 per cent to Rs 17,860 per share, Hero MotoCorp by 12.3 per cent, Maruti Suzuki by 10.5 per cent and Mahindra & Mahindra by 9.1 per cent.
Private lender IndusInd Bank closed 10.9 per cent higher, Bajaj Finance by 10.6 per cent and State Bank of India by 10.1 per cent. ICICI Bank gained by 2.4 per cent after one of the promoter entities sold a part of its stake to deleverage the debt.
The other prominent winners were UltraTech Cement, Britannia and Titan which saw gains of over 9 per cent each.
However, IT stocks were under pressure with Tata Consultancy Services, Tech Mahindra and Infosys in the red. Zee Entertainment dropped by 2.8 per cent following reports that its promoter has been restricted from selling its stake in the media company.
The government led by Prime Minister Narendra Modi has unveiled various measures to arrest the falling growth -- from rolling back of higher tax surcharge for foreign investors to mega reforms in the public sector banking space.
The gross domestic product (GDP) grew by 5 per cent in April to June quarter compared to 8 per cent in the same quarter of 2018-19, mainly due to slowdown in manufacturing, muted auto sales and construction activity.