Nifty IT at fresh record highs after G7 nations agreed on global corporate tax rate, focus shifts on G20; Giants TCS, Infosys, HCL Tech skyrocket

The G7 nations have agreed to back the minimum global corporate tax rate of at least 15%.

Jun 08, 2021 11:06 IST India Infoline News Service

Indian IT companies have been on a winning streak since the start of this week after the Group of Seven (G7) nations agreed to back a minimum global corporate tax rate. Heavyweight technology stocks in Indian markets have witnessed a sharp rally and further lifted sectoral indices on both Sensex and Nifty 50 even though the broader markets remained volatile this week ahead of key inflation and monetary policies of major economies.

At around 11.37 am, Nifty IT was trading at 27,695.75 up by 400.10 points or 1.47%. The index has hit a new record high of 27,732.35 in the early deals today.

Although Coforge led the gainers' list on the index strengthening by 3%, however, it was major IT companies that added significant gains.

L&T Infotech jumped by 2.4%, while Mindtree, Infosys, Tech Mahindra and HCL Tech skyrocketed around 2% each. Index heavyweight TCS climbed by 1.3% each. Wipro surged by 0.8% as well.

Oracle Financial Services was marginally up. However, Mphasis was the only underperformer plunging marginally.

The G7 having the worlds richest nations finally reached an agreement on the landmark global minimum corporate tax deal. The G7 comprising of the US, the UK, France, Germany, Italy, Japan and Canada, on Saturday, agreed to back the minimum global corporate tax rate of at least 15%.

This global corporate tax rate is seen as favourable for technology companies as their future tax obligations have become more predictable. However, tech giants have barely reacted to the development on Monday with shares of Facebook, Amazon.com, Apple, Microsoft and Google-parent Alphabet lower between 0.4% and 0.7%. Also, Europe's tech stocks index were on a subdued level.

Although, overall, the technology stocks outperformed major indices on Wall Street. The tech-heavy Nasdaq Composite ended at 13,881.72 up 0.5% overnight, while Dow Jones and S&P 500 slipped.

The focus has now shifted to G20 countries for a broader agreement on the new tax proposals. The G20 involves nations like Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States.

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