The market notched up its biggest single-session rally in about three weeks on Tuesday to end above the 26,000-mark as the Sensex rebounded by over 406 points after Finance Minister Arun Jaitley underlined the need to have globally compatible tax rates to broad-base the economy. He has also gone to great lengths to allay market fears that the government has no intention to impose tax on long-term capital gains on share earnings.
The broader NSE Nifty too rebounded from a 7-month low, which was hit on Monday, as it went past the 8,000-mark. The benchmark Sensex opened higher and closed at 26,213.44, a gain of 406.34 points, or 1.57%, its biggest single-session rally since December 8 when it had gained 457.41 points. It had dropped by 233.60 points yesterday, hit by talk of higher taxation after Prime Minister’s remarks on securities market.
The NSE 50-share Nifty recovered 124.60 points, or 1.58%, to end at 8,032.85 after moving in a range of 8,044.65 to 7,903.70. A higher opening in Europe and a mixed closing at other Asian markets too offered some cues. “…what you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture products and provide services which are more competitive in character and therefore, your taxes have to be globally compatible,” Jaitley had said earlier.
Sentiment changed for the better after Jaitley clarified that the government has no intention to impose tax on long-term capital gains, triggering buying by investors, which saw the indices regain key levels, traders said. Recovery, particularly in beaten-down pharmaceutical, FMCG, metal and oil and gas stocks on value-buying fuelled the rally. However, concerns remained as the rupee depreciated to to again breach the 68-mark against the dollar during the day.
Out of the 30-share Sensex pack, 29 ended higher. ITC emerged as the top gainer by surging 4.02%, followed by Tata Steel (3.23%). Other major gainers were Adani Ports (2.87%), ICICI Bank (2.25%), Lupin (2.13%) and SBI (1.88%). FMCG went up by 2.55%, followed by metal 2.46%, consumer durables (2.05%) and healthcare (1.73%). Tracking the overall trend, broader markets saw buying by retail investors, which helped mid-cap and small-cap indices move up by 1.71% and 1.49%, respectively. Meanwhile, foreign funds sold shares worth Rs 1,095.04 crore yesterday, as per provisional data. Overseas, European stocks were trading higher as key indices like Frankfurt, Paris and London’s FTSE rose by up to 0.14%. Asian stocks ended mixed, with Japan’s Nikkei rising 0.03% and Shanghai Composite shedding 0.19%. Financial markets in Hong Kong remained closed today for a public holiday.
Source: dnaindia.com