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Brokers and tax consultants said the Budget proposals had provided markets little reason for cheer.
The finance ministry's statement came as a relief to foreign institutional investors, which emerged net buyers today, after selling yesterday. "The press release clarifies the existing circular No 789 continues to be in force (pending ongoing discussions between the authorities) and the intention of the proposed language was not to enable questioning of the TRC," said Gautam Mehra, executive director (tax and regulatory services), PricewaterhouseCoopers India. "This should bring relief to foreign investors. It is also stated the language of the provisions will be suitably modified when the Finance Bill is taken up for consideration," he added.
Today, the BSE's Sensex rose 0.3 per cent to 18,918.52, while the National Stock Exchange's Nifty gained 0.5 per cent to 5,719.70.
Some brokers said the markets did not rebound due to the absence of sizeable short positions. Short-covering of these positions soon after the clarification would have led to a sharper rise for the markets.
