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Sensex, Nifty witness biggest ever rally in 10-years on FM's corporate tax cut announcement

Indian equity market witnessed the biggest rally on a single day in 10-years as FM cut corporate tax rates. The headline Nifty surged 1.8% during the week on the back of strong buying in the equity market.

Nifty recovered from an intra-week low of 10670 to move towards 11400. Bank Nifty also witnessed a smart rally registering a weekly gain of 3.1%. Staggering rally witnessed in the Nifty 50 stocks on Friday was led by auto stocks.

In a measure to boost the Indian economy, FM announced cut in corporate tax rate; the effective corporate tax rate will be lowered to 25.17% from 30%.

The government also scrapped the minimum alternative tax for domestic companies. New domestic manufacturing companies incorporated after October 1, 2019, can pay income tax at a rate of 15% without any incentives.

The effective tax rate for new manufacturing companies will be 17.01% inclusive of all surcharge and cess.

India's annual wholesale price inflation in August was at 1.08%, remaining unchanged from the previous month. Last month, the annual wholesale price inflation was largely in line with a forecast of 1.04% by economists.

Wholesale food prices in August rose 5.75% yoy vs. a 4.54% rise a month earlier.

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