From mint · Dipti Sharma · · 2m
Stocks Jump After Sitharaman Promises Investor Tax Hearing
Finance minister Nirmala Sitharaman's comments lift Indian stocks after government pledges to hear investor views on LTCG tax.
In brief
Finance minister Nirmala Sitharaman's comments lift Indian stocks after government pledges to hear investor views on LTCG tax. Indian stocks rose 1.6% as Nifty 50 hit its biggest gain in two months following finance minister Nirmala Sitharaman's pledge to hear investor views on capital gains tax. Originally reported…
Stocks Rally After Sitharaman Comments
Indian stocks rose 1.6% as Nifty 50 hit its biggest gain in two months after finance minister Nirmala Sitharaman pledged to hear investor views on capital gains tax.
Sitharaman Addresses Tax Concerns
Finance minister Nirmala Sitharaman said Indian and foreign investors raised questions about long-term capital gains tax, securities transaction tax, and similar taxation for asset classes.
Market Reaction to Comments
The Nifty 50 rose 1.6% to close at 22,721.95, its biggest single-day percentage gain since 3 August, while the Sensex gained 1.5% to settle at 73,033.78.
Foreign Selling Impact
Foreign portfolio investors sold $32 billion worth of Indian equities this year, with net sales of ₹ 1,305 crore on Tuesday.
Tax Rate Change
The Union budget in July 2024 raised the tax rate on long-term capital gains from listed equity shares to 12.5% from 10%.
Investor Confidence Boost
Analyst Feroze Azeez said Sitharaman's comments raised hopes of a possible reassessment of tax policies that have been a point of concern for investors.
IT Stocks Lead Rally
IT stocks led the rally with the Nifty IT rising 5.2%, the biggest gain among NSE sectoral indices.
Rupee Gains
The rupee gained 0.5% on Tuesday, extending its 1% rise from Monday after the Reserve Bank of India announced measures to curb speculation.
Market Challenges
Persistent geopolitical tensions could keep interest rates elevated and prolong market challenges, according to Saurabh Mukherjea.
Earnings Outlook
Nuvama Institutional Equities estimates Nifty 50 earnings will grow 22% year-on-year in Q2FY27, taking first-half growth to around 20%.
Market Recovery
A broader market recovery would depend on geopolitical tensions easing and policymakers adopting a more constructive approach towards foreign investment.
The short version
Indian stocks rose 1.6% as Nifty 50 hit its biggest gain in two months following finance minister Nirmala Sitharaman's pledge to hear investor views on capital gains tax.
