The markets moved in a narrow groove, but sentiment received a leg up when reports said finance minister P Chidambaram is set to review the minimum alternative tax for some industries. Another report that redeemed the trend was the news of a package being prepared to revive the capital markets.
By the end of last week, the ministry came out with the package which signalled better news for the mutual funds and foreign institutional investors.
Further, according to market circles, the package has clearly provided another impetus to the debt market instead of equity at a time when the retail investor focus was already shifting towards the latter.
According to the fresh package, it has been decided to allow foreign institutional investors to invest up to 100 per cent of their funds in debt instruments from the earlier level of 30 per cent.
While enhancing the exemption limit under 80 (L) of the income tax, the minister has proposed to revert to a two-part arrangement under which Rs 3,000 would be exclusively reserved for income from investment in shares and mutual funds.
The BSE-30 scrip Sensitive Index had on Monday closed at 3514.61 owing to buying support from domestic financial institutions such as the UTI and the LIC. This, coupled with select buying by the foreign institutional investors kept the market buoyant at 3562 levels at Tuesday
