Sensex racks up most gains in 3 weeks
The market notched up its biggest single-session rally in about three weeks today 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 yesterday, 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 per cent, 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 per cent, 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 per cent, followed by Tata Steel (3.23 per cent). Other major gainers were Adani Ports (2.87 per cent), ICICI Bank (2.25 per cent), Lupin (2.13 per cent) and SBI (1.88 per cent).
FMCG went up by 2.55 per cent, followed by metal 2.46 per cent, consumer durables (2.05 per cent) and healthcare (1.73 per cent).
Tracking the overall trend, broader markets saw buying by retail investors, which helped mid-cap and small-cap indices move up by 1.71 per cent and 1.49 per cent, 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 per cent.
Asian stocks ended mixed, with Japan's Nikkei rising 0.03 per cent and Shanghai Composite shedding 0.19 per cent. Financial markets in Hong Kong remained closed today for a public holiday. (PTI)