After the Indian finance minister Nirmala Sitharaman announced cutting back in the corporate tax-rate on Friday, 20th September, the Indian stock indices closed the day on a decade-long high. The Bombay Stock Index (BSE) the country’s benchmark index gained around 5.3 per cent as did the National Stock Exchange (NSE) that is based in the Indian capital, New Delhi.
In total, both indices gained as much as 1. 5 per cent for the entirety of the week. For the day, BSE ended up with around 38,014 points, an increase of over 1,900 points. The NSE ended the day with 11,274 points, a gain of about 570 points.
The rupee that had been sliding against the United States’ dollar for the last few weeks also gained some traction against the global benchmark currency. In the initial trading hours, the rupee’s value rose by 0.9 per cent to about 70 against the dollar.
At closure, though, the rupee lost some ground and traded at slightly over 71 against the greenback note. Sitharaman decided to rollback her initially laid-out corporate tax hike in the 2019-2020 national budget from 30 per cent to 25 per cent.
She also clarified that the rate would be brought down 22 per cent for those companies that would not be seeking to additionally incentivize by way of other tax-related benefits. Lastly, Sitharaman also said this rate would put India on parallel terms with other nations’ corporate-tax rates.
This bullish trend in the Indian stock market comes right at the time when Indian prime minister Narendra Modi is set to travel to the United States.