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  Business   Market  24 Sep 2019  Stocks soar for second day; Sensex above 39,000

Stocks soar for second day; Sensex above 39,000

FC INVESTIGATIVE BUREAU
Published : Sep 24, 2019, 1:59 am IST
Updated : Sep 24, 2019, 1:59 am IST

Analysts increased earnings estimates for both the indices by as much as 10 per cent to factor in the lower tax burden.

The BSE Sensex jumped 1,075 points, or 2.8 per cent, to 39,909.03 while the NSE Nifty-50 Index advanced 326 points, or 2.89 per cent, to 11,600.20 .
 The BSE Sensex jumped 1,075 points, or 2.8 per cent, to 39,909.03 while the NSE Nifty-50 Index advanced 326 points, or 2.89 per cent, to 11,600.20 .

New Delhi/Mumbai: Stocks rose for a second day on expectations the government’s surprise $20 billion tax cut will revive economic growth and boost company earnings.

The BSE Sensex jumped 1,075 points, or 2.8 per cent, to 39,909.03 while the NSE Nifty-50 Index advanced 326 points, or 2.89 per cent, to 11,600.20 . Both gauges surged 5.3 per cent on Friday, marking their biggest gain since May 2009, after the corporate tax rate was lowered to 22 per cent from 30 per cent.

 

In the two-day rally, the Sensex posted its biggest two-day gains of 2,996.56 points, or 8.30 per cent, while the Nifty soared 895.40 points, or 8.36 per cent. Investor wealth soared by a whopping Rs 10.35 lakh crore in the two sessions. The BSE’s market capitalisation has reached Rs 1,48,89,652.44 crore.

As many as 1,638 scrips rose on the BSE on Monday while 103 stocks soared to their 52-week high and 216 hit the upper limit.

Analysts increased earnings estimates for both the indices by as much as 10 per cent to factor in the lower tax burden.

The tax cuts have “significant positive implications for corporates’ profitability, broader economy and market valuations,” Nomura Holdings Inc. strategists wrote in a note. “We expect the strong monetary stimulus in the near-term to result in a cyclical recovery followed by investment/ exports-led growth in the medium term,” it said.

 

The reduction has led to “earnings upgrades, hence we believe that Nifty, Sensex are set for a higher trajectory, and a rally up to 12,500 and 42,000 respectively is likely in the next three-six months,” Stewart & Mackertich Wealth Management Ltd analyst wrote in a note on Friday. Foreign investors will probably shift their negative stance on Indian equities, he said.

Thirteen of 19 BSE sectoral indices rose, led by gains of more than 5 per cent in capital goods, financial and industrial stocks. Sixteen of the 31 Sensex members and 32 of the 50 Nifty companies advanced.

Technical analysts said a reasonable long candle was formed on the Nifty on Monday with minor upper and lower shadow, with sharp opening upside gap. This pattern indicates a sharp upside momentum prevailing in the market. The short-term trend of the Nifty, they said, is quite positive. There is also a possibility of consolidation/minor downward correction at the highs before showing further upside.

 

Tags: bse sensex, nse nifty