Three of the Tech giants, Infosys, TCS and HCL lost on a day when Stock Markets logged its biggest gain in 10 years.
Infosys, Tata Consultancy Services (TCS) and HCL Technologies were among the rare set of stocks on the benchmark Nifty that lost on a day Indian equities logged their biggest gains.
Investors shift to domestic-focused companies as exporters to gain less from tax cut, they are buying into home-focused companies instead of exports-driven technology ground-breaker after New Delhi announced cuts in corporate tax rates.
Benefits of the corporate tax cuts, stretching to 10 percentage points, would be greater for companies that largely generate their revenue at home and don’t enjoy many operational exemptions.
By contrast, many exports-driven companies have lower tax incidence due to exemptions, and stand to benefit less from the tax incentives announced on September 20.
TCS, Infosys and Tech Mahindra declined Friday (September 20), with investors trading three times more shares than they do on an average on anticipation the sector might not see an immediate impact of the corporate tax cuts.
Wipro, which would benefit from the government’s move to not impose a buyback tax for transactions before July 5, was an exception. It climbed Rs 4.25, or 1.76%, on a day the Sensex soared a record 1921.15 points to close at 38,014.62 points.
Biggest Stock Markets rally in 10 years
The benchmark indices saw their biggest single-day jump in a decade. The BSE Sensex closed at 38,014.62, up 1921.15 points, or 5.32%, while the Nifty was at 11,274.20, up 569.40 points, or 5.32%.
The BSE Midcap index ended with a gain of 6.28%, while the BSE Smallcap index rose 3.94%.
Earlier, the Sensex gained 2,111 points on 18 May 2009, making today’s rally the biggest intra-day gain of Sensex.
Percentage-wise, the Sensex was up 6.15% on 16 May 2014 when Prime Minister Narendra Modi had formed the government for the first time after winning the general elections with a thumbing majority.
Similarly, the Nifty’s earlier biggest intra-day gain was 713 points on 18 May 2009. Percentage-wise, it surged the most (5.3%) on 16 May 2014.