Nifty and Sensex has for a second-consecutive day shown ground-breaking rally, surging almost 3.2% each. The surge comes in the wake of increased buying in the markets by both domestic and foreign institutional investors. Among the sectoral indices, Nifty Private Bank tops the charts.
Of its constituents, HDFC Bank rallied by a steep 7% after the previous session's rally of almost 9% on account of corporate tax rate cut measure. The stock on the BSE recorded a new 52-week high price of Rs. 1285 per share after closing at Rs. 1200.10 on Friday.
For the quarter ended March, the private sector lender had an effective tax rate of 33.4% and now as the rate has been revised lower to 22% without incentives and exemptions from the earlier 30%, the bank is likely to benefit substantially from the cut in corporate tax.
Experts suggest that lowering of corporate tax rate will benefit most private lenders on an immediate basis.
Further, positive outlook on the stock in the long term has also been supporting its price levels. Morgan Stanley considers the stock as a "solid long-term play" and has an 'overweight' rating with a target price of Rs. 3,000.
At 1:41 pm, the stock of HDFC Bank quoted higher by 5.17% or Rs. 62.05 at Rs. 1262.15 per share on the BSE.