The strong upswing on stocks that started on Spetember 20 on the back of cut in corporate tax rates continued on Monday with the benchmark indices surging more than 2% during the morning session.
At 10:25 a.m., the 30-share Sensex was trading 766 points or 2.01% higher at 38,780. Sensex constituents like L&T, ITC, HUL, Asian Paints,and IndusInd Bank were trading more than 5% higher.
The overall market breadth was quite strong with nearly 1,400 stocks gaining ground as against 562 declines.
Meanwhile, the 50-share Nifty was trading higher at 11,501, up 227 points or 2.01%.
"We see these measures as bringing India back into favor for FPIs," stated Emkay Global in its latest India Strategy report.
"After factoring in just the base tax benefit increase of around 8.5% of large-cap indices, India's PE (price earnings) premium over EM (emerging markets) is still well below historical averages even after Friday’s rally. We thus expect India to see a return of foreign flows — or at least stop underperforming other EMs on flows — thus overall supporting valuation multiples," it said.
