New Delhi | Jagran Business Desk: Indian benchmark Indices on Monday jumped over 3 per cent, extending Friday’s gains as the sentiment turned positive after the government last week cut effective corporate tax rate.

The Sensex rose by 1,075 points to close at more than two-month high on Monday, extending its run for a second straight day on the back of gains in financial, banking and FMCG stocks after the tax booster by the government.  

Meanwhile, the broader NSE Nifty zoomed by 326 points or 2.89 per cent to end at a two-month of 11,600.20 with 32 of its constituents closing with gains. The two-day gain has pushed up investor wealth by over Rs 10 lakh crore.

Here are 10 things you need to know about the two-day Sensex rally:

1. In the two-day rally, Sensex posted its biggest two-day gains of 2,996.56 points or 8.30 per cent, while the 50-share Nifty soared 895.40 points or 8.36 per cent.

2. This comes after Finance Minister Nirmala Sitharaman delivered a surprise cut in corporate tax rates. Sensex logged its biggest single-day jump in over a decade by surging 1,921.15 points or 5.32 per cent while Nifty zoomed 569.40 points or 5.32 per cent on that day.

3. Top gainers in the Sensex pack included Bajaj Finance, L&T, Asian Paints, ITC, Axis Bank, Kotak Bank, ICICI Bank, HDFC twins, Maruti and SBI, rallying up to 8.70 per cent. On the other hand, Infosys, RIL, Tata Motors, PowerGrid, NTPC, Bharti Airtel, Tech Mahindra, TCS and HCL Tech tanked up to 4.97 per cent.

4. While Zee Entertainment, Power Grid, Tata Motors, Dr Reddy's Labs, Cipla and NTPC were among the laggards.

5. IT stocks also saw some profit-taking today with Infosys losing 5 per cent and TCS 2.5 per cent.

6. Meanwhile, the rupee on Monday was trading flat at 70.92 against US dollar. Brent crude futures fell 0.79 per cent to USD 63.77 per barrel (intra-day).

7. “Markets for the second day in a row, after the historic decision to cut corporate tax, witnessed a stellar rally. A lot of buoyancy has come from the fact that these measures will boost the profitability of a number of companies, which will either be used to stimulate demand by lowering prices, payouts to shareholders in the form of dividends or using it for capital expenditure,” said Devang Mehta, Head - Equity Advisory, Centrum Wealth Management.

8. “Rally continued as the positive sentiment for revival in earnings growth attracted investors to the market. Banks outperformed while mid and small cap witnessed strong bargain buying in expectation of turnaround in consumption story and improvement in the balance sheet,” said Vinod Nair, Head Of Research at Geojit Financial Services.

9. However, some analysts have turned cautious after the sharp up move in past two sessions. “Indian markets are trading near peak valuations so we would remain cautious on the markets and expect it to consolidate in the near term. However, the recent announcements made by the FM are definitely positive for the Indian economy from a long-term perspective. Hence, investors should focus on accumulating fundamentally sound stocks," said Ajit Mishra, vice president of research at Religare Broking.

10. Meanwhile, some analysts are positive on the midcap and smallcap stocks that have also participated in the two-day rally. “Mid and small caps are likely to catch in a big way going ahead," said Amit Shah, technical research analyst with Indiabulls Ventures.

(With PTI inputs)

Posted By: Aalok Sensharma