Fireworks before Diwali! Indices close with solid weekly gains

Indian stock markets celebrated early Diwali with benchmark indices registering highest single-day gains in more than a decade. The 30-share index Sensex surged 1,921.15 points to end at 38,014.62, while, the 50-share index Nifty jumped 569.40 points close at 11,3274.20. The broader index represented by the NSE Nifty 500 gained 5.29 percent on Friday.

The Sensex ended the week higher by 1.68 per cent while the Nifty ended 1.8 per cent higher, mostly due to the Friday bonanza.

Earlier on Friday, Finance Minister, with an aim to stimulate the economy, gave a big surprise to the market by cutting corporate tax rate cut to 22 per cent. The reduction in corporate tax rates has been a long standing demand of India Inc. that was fulfilled by the FM just ahead of the festive season. Reacting to this news, the benchmarks clocked their biggest intraday gains in a decade as lower corporate tax rate can spur growth and trigger job creation.

Indian markets had started the week on a negative note following global concerns over drone attacks on Saudi Aramco’s oil refinery. After the attacks, crude oil registered its biggest single day gain to reach the levels of US$ 70 per barrel. This hampered the sentiment over the weekend, and on Monday, markets tanked the most since June this year.

The positive sentiments are likely to continue and can trigger further buying in the market. The coming week will also see some earnings estimates for H2FY20E and FY21E, which can be higher than any other estimates. The positive sentiments at domestic front, though, will need some support from global markets.