Indian markets saw improved sentiment and registered highest single-day gain in almost a decade led by Finance Ministry’s historic decision to slash the corporate tax rate to 22% from 30% (excluding surcharge and cess). Impact of corporate tax reforms resulted in positive FPI’s flows (~$1 bn) in Indian markets after a sharp sell-off seen in August.
Indian sovereign bond ended 14 bps higher to 6.70% in September. The Reserve Bank of India has cut its benchmark repo rate by 25 basis points to 5.15%, in the fifth straight interest rate cut. In this year, the central bank has cut rates four times by 110 basis points.
The Monetary Policy Committee (MPC) today reduced repo rate by 25 bps from 5.40% to 5.15%. The stance of the policy remained unchanged at “accommodative”. Five member of the MPC voted to cut rates by 25 bps whereas one member (Dr. Ravindra H. Dholakia) voted for a 40 bps rate cut.
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