BNP sees second-order boost on corporate tax cut, tweaks stock picks

The surprise tax rate cut came after economic growth in the April-June quarter slumped to its lowest level in six years, hitting the nation's smaller stocks the hardest

A surprise cut in the corporation tax rate will lay the groundwork for “second order benefits” to the economy over the next several months or even years, providing a favourable backdrop for broader stock selection at the same time, according to BNP Paribas Securities India.

The brokerage has re-balanced its “quality list” of stocks again, after having made adjustments a day before the government reduced corporation tax rates (September 20). 

This time, it added firms ranging from large-cap stocks such as Britannia Industries to smaller names like Manappuram Finance, wrote  Abhiram Eleswarapu, head (equity research), BNP Paribas Securities, in a