Corporate Tax Cut: Modi govt has done more than our expectations, says VK Sharma of HDFC Securities
As the Modi government today announced a series of tax incentives to boost the industry and give a big push to investment, Indian stocks surged over 5%, and showed their best day performace in more than a decade.
As the Modi government today announced a series of tax incentives to boost the industry and give a big push to investment, Indian stocks surged over 5%, and showed their best day performace in more than a decade. Talking about the positive sentiment in the market, VK Sharma of HDFC Securities told Zee Business that key demands of common investors is still pending and the same would be most probably fulfilled in the coming budget, but added that the government has done more than our expectations.
"These announcements were not expected so early, therere, we can not blame the government now that nothing is being done. Rather them. Rather, it now upto the companies to do their homework and make their effort to achieve their expectations," said VK Sharma.
Talking about the government measures being taken to restore the confidence in economy, he said that today's GST Council meeting may also come out with certain measures, although it may not give any relief to Auto sector, adding that there is no expectation on the GST front.
When asked if the announcements would spur consumption, Sharma said that the tax rebate will take some time to fructify, rather in coming three years, but the sentiment is good now, adding "We have had a good monsoon after so many years under the Modi government, and it will no doubt add to Rabi crop, and reservoirs will also be in a better state, therefore the fruits will take ripe after 6 months."
About market, he said that from today till the arrival of Diwali, we will witness rising trend which may decline a bit after that but there will no major impact.
— Zee Business (@ZeeBusiness) September 20, 2019
Notably, Indian equity indices clocked their biggest intraday gains in a decade as the government lowered corporate tax rate to spur growth. The BSE Sensex surged 1,921.15 points to 38,014.62, and the Nifty 50 jumped 569.40 points to close at 11,3274.20. The broader markets represented by the NSE Nifty 500 Index surged 5.29 percent.
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Major gainers on the Nifty were Eicher Motors, Hero MotoCorp, IndusInd Bank, UltraTech Cement and Maruti Suzuki, while losers were Power Grid, Infosys, TCS and NTPC.