Market euphoria over Friday’s corporate tax cuts spilled over on to Monday as the Sensex jumped 1075 points to breach the 39000-mark and close at an over two-month high of 39090.

Investor wealth rose Rs 3.52 lakh crore on Monday, while total wealth jumped Rs 10 lakh crore since finance minister Nirmala Sitharaman stunned the markets by slashing corporate taxes on Friday.

Foreign portfolio investors (FPIs) seem to have staged a comeback with provisional data from the NSE showing they made net purchases of Rs 2,700 crore. Domestic institutions, however, bought stocks worth only Rs 292 crore.

Monday’s gains were led by financials, FMCG and capital goods on hopes that they will benefit from the tax cuts, in terms of higher earnings and a pick-up in economic growth over the medium term. The sentiment was also buoyant with brokerages upgrading various stocks.

“From the perspective of banks and NBFCs, a reduction in tax rates will have two positives — higher profitability and, thereby, higher return ratios. An improvement in corporate earnings and increased manufacturing capex is expected to further add to the banking sector’s business potential,’’ ICICI Direct said in a note.

It upgraded Bajaj Finance to “buy” from “hold” and revised the target for NBFCs and housing finance companies in its coverage.

Jefferies said in a report that the tax measures will provide a fillip to earnings of consumer staples by up to 14 per cent, though companies could pass on some benefits to consumers to revive weakening consumption trends.

On Monday, the 30-share Sensex opened with a gain of over 829 points at 38844 and crossed 39000 to hit a day’s high of 39441.12.

It later ended at 39090.03 — a rise of 1075.41 points or 2.83 per cent. The broader NSE Nifty zoomed 326 points or 2.89 per cent to finish at a two-month high of 11600.20, with 32 of its constituents closing with gains.

Brokers said trading at the National Stock Exchange was marred by some glitch in the closing session for 10 minutes.

Top gainers in the Sensex pack included Bajaj Finance, L&T, Asian Paints, ITC, Axis Bank, Kotak Bank, ICICI Bank, the HDFC twins, Maruti and the SBI, rallying up to 8.70 per cent. HDFC Bank, which hit a new 52-week high, settled with gains of almost 5 per cent at Rs 1258.45 with its market cap nearing Rs 7 lakh crore.

Infosys, RIL, Tata Motors, Tech Mahindra, TCS and HCL Tech fell up to 4.97 per cent over apprehensions the IT sector will not gain much from the tax cuts.

“The 10 per cent tax reset (cut) has set off frantic buying across high tax-paying entities in the last two trading sessions,” S. Ranganathan, head of research at LKP Securities, said.

The rebalancing of portfolios has led to selling in IT & pharmaceuticals.