Starting stronger on Monday, the first business day after the Centre announced corporate tax cut, the S&P BSE Sensex was trading 1,074 points, or 2.83 per cent, higher at 39,089 level, while Nifty50 was ruling 266 points, or 2.36 per cent, higher at 11,540-mark. The Indian rupee slipped in the early trade on Monday. It opened lower by 10 paise at 71.04 per dollar versus Friday’s close 70.94.

On Friday, finance minister Nirmala Sitharaman announced corporate tax cut to 22%. Effective corporate tax rate after surcharge will be 25.17%. New manufacturing companies will have to pay an even lower corporate tax rate of 15%.

The minister has ruled out an immediate reduction in spending to balance this year’s budget despite fears in some quarters that fiscal slippage may undermine India’s economic stability. Centre wants the ministries to spend, Sitharaman said on Sunday.

On Monday, according to reports, L&T (9 per cent), ITC (8 per cent), IndusInd Bank (7.7 per cent), and ICICI Bank (5 per cent) were the top gainers during the morning deals at the S&P BSE Sensex, while IT stocks like Infosys (2.2 per cent), TCS (1.6 per cent), and Tech M (1.5 per cent) slipped the most at the index.

In the broader market, the S&P BSE MidCap index gained 2.4 per cent, while S&P BSE SmallCap was ruling 1.7 per cent higher.

According to Reuters, Asian shares started higher on Monday on hopes of an interim China-US tariff deal after the two countries described their talks as “productive” and “constructive”.

Japan’s Nikkei opened 0.2 per cent higher while Australian shares added 0.5 per cent. South Korea’s Kospi was a touch weaker. That left MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.5 per cent. At 7 am, Nifty futures on the Singapore Stock Exchange (SGX Nifty) was trading 56 points higher, suggesting a positive opening for domestic indices.