Sensex, Nifty continue bull run despite bearish IT, pharma; FMCG, financials fuel the rally

Samiran Chakraborty, chief economist at Citi, in an interview to CNBC-TV18 said that the corporate tax rate cuts announced by Sitharaman are a step in the right direction.

"Tax rate cut is the right path to take and it will increase competitiveness, productivity, and private investment. This is one of the biggest reforms that we have seen in a long time which tries to address the problem from the supply side by trying to get in more private investment into the economy. This process will take a while before private investment kicks in, but this is a much better quality growth than giving a demand stimulus which could have given us short term growth, but would not have changed the outlook from a more medium-term perspective," he said.

The Sensex opened at 38,844, up 829.38 points or 2.18 percent, from its previous close. The Nifty 50 opened 268.5 points or 2.38 percent higher at 11,542.70.

In broader markets, the Nifty MidCap index rose 3 percent, while the banking gauge, Nifty Bank surged almost 5.3 percent, rising over 1500 points, trading well over the 30,500 zone. FMCG, auto, metal and CPSE were other major gaining sectors, while IT, pharma and telecom declined. The IT sector barometer, Nifty IT, fell 2.8 percent.

Among top index gainers, L&T, Bajaj Finserv, IndusInd Bank, Britannia, Bajaj Finance, ITC and Asian Paints rose between 8 and 10 percent.

Infosys, Dr Reddy's Labs, Tata Consultancy Services, Wipro and Zee Entertainment Enterprises, Tata Motors, NTPC and Power Grid Corp fell between 1.5 and 4.5 percent.

Reliance Capital shares slipped 11 percent intraday on Monday after CARE Ratings downgraded the rating to default for the company's long-term debt program, market-linked debentures and subordinated debt of the company.

In the currency market, the rupee opened marginally lower by 9 paise to 71.03 against the US dollar, as rising crude oil prices and concerns regarding US-China trade war kept investors edgy.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 35.78 crore on Friday.

Most Asian share markets slipped on Monday as investors waited for more clarity on Sino-US trade talks, while oil gained more than 1 percent as Middle East tensions remained elevated. Japan's Nikkei traded with mild gains, while Hang Seng slipped 0.77 percent.