Indian stock markets today surged the most in about 10 years on expectations of higher corporate profits after the government slashed corporate tax rates . The government also scrapped enhanced surcharge, earlier announced in the budget, on capital gains on sale of equity share or a unit of an equity oriented fund. These announcements are part of a ₹1.45 lakh crore stimulus package announced by Finance Minister Nirmala Sitharaman today. “This is not bigger than budget, this is bigger than last 20 budgets," tweeted fund manager Samir Arora.

The Indian rupee on Friday rose by 40 paise to settle at 70.94 to the US dollar after forex market sentiment was buoyed by the government decision to slash corporate taxes.

Prime Minister Narendra Modi in a tweet said: "The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians."

The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians. https://t.co/4yNwqyzImE — Narendra Modi (@narendramodi) September 20, 2019

Here are 10 updates from Indian stock markets:

1) “This is yet another surgical strike on bears and negative sentiments in the economy which will create an environment of surplus in the hands of corporates for making further investments and ease their liquidity concerns. Companies in consumer finance, and banks will have maximum benefits. This is a path-breaking move delivered by Modi 2.0 government in the interest of economy at the cost government exchequer in times of crises which will go down well in the history," says Jimeet Modi, founder & CEO, SAMCO Securities & StockNote.

2) The Sensex rose 1,921 points to close at 38,014 while Nifty surged 5.5% to 11,274. Analysts say today's announcements will help boost corporate earnings. "The finance minister has taken strong measures to kick-start the economy. The corporate earnings had worsened in the last few quarters mainly due to the ongoing slowdown. The cut in corporate tax rate would mean more income for corporates. This would have a direct positive impact on the earnings per share or EPS on all domestic companies," said Ajit Mishra, vice president of research at Religare Broking.

3) Banking and auto stocks were in the limelight today with Nifty Bank index rising 8% and Nifty Auto index surging 10%.

4) Among Sensex stocks, Hero MotoCorp, Maruti, IndusInd Bank, SBI, Bajaj Finance, M&M, HDFC Bank, HUL, L&T, Asian Paints, Vedanta, Tata Steel and Tata Motors rose between 7% and 12%. Market heavyweight RIL surged 6%.

5) Commenting on today’s announcements, Ajay Bodke, CEO of PMS at Prabhudas Lilladher, said: "It is in a true sense an early arrival of festival of lights (Diwali) and banishment of long period of darkness and gloom bothering the Indian economy." After hitting new highs in June, Indian markets struggled over the past few months amid a slowing down of the economy and selling from foreign investors.

6) However, bond prices slid today on fears of fiscal slippage with 10-year G-Sec yield rising to 6.8% from around 6.6% levels before the announcement.

7) As part of corporate tax cuts announced today, basic corporate tax rates have been slashed to 22% from 30% while for new manufacturing companies (incorporated on or after 1st October 2019 and that start production before March 2023) they has been cut down to 15% from 25%.

8) The government also announced a rollback of enhanced surcharge announced in Budget on capital gains arising on sale of any securities including derivatives in the hands of foreign portfolio investors.

"The easing of enhanced surcharge has the potential to revive FII sentiments as well, as the corporate tax rate makes Indian companies more competitive in the global markets," said Ajit Mishra of Religare Broking.

9) The government also rolled back enhanced surcharge, announced earlier in Budget, on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for STT.

10) Broader markets also participated in the rally with BSE midcap index rising 4.5% and smallcap index 2.5%.

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