Business Standard

Sensex climbs 220 pts to reclaim 40k-mark on tax rejig buzz


Press Trust of India Mumbai
The BSE Sensex rallied 220 points to reclaim the 40,000-mark on Wednesday as strong corporate earnings and expectations of a rejig in tax structure for equity investors turbocharged sentiment.
After hitting a high of 40,178.12, the 30-share index ended 220.03 points, or 0.55 per cent, higher at 40,051.87. The benchmark closed above the key 40,000-level after June 4, 2019.
Similarly, the broader NSE Nifty jumped 57.25 points or 0.49 per cent to close at 11,844.10.
Brokers said equity market sentiment improved after reports said the government is looking at scrapping the dividend distribution tax and is also reviewing other levies such as long term capital gains tax (LTCG) and securities transaction tax (STT).
Strong earnings delivery from bluechips and meaningful contribution from the corporate tax cut to profits coming through has also boosted market mood, they added.
Top gainers in the Sensex pack included SBI, TCS, ITC, Bharti Airtel, Sun Pharma, Infosys and Bajaj Auto, rising up to 3.37 per cent.
On the other hand, Yes Bank, Maruti, IndusInd Bank, ICICI Bank and Bajaj Finance fell up to 2.41 per cent.
"Market is positive on expectation of fresh reforms from the government and change in the long-term capital gain tax in the future. After a long time, market is seeing incentive to invest in equity due to reduction in taxation producing better than expected Q2FY20 results, providing a hope that earnings growth will revamp further in H2FY20.
"Results are adding fuel to the market despite weakness in other global markets ahead the Fed interest rate decision and US-China trade talks agreement," said Vinod Nair, Head of Research, Geojit Financial Services.
Sectorally, BSE IT, teck, oil and gas, FMCG, capital goods, utilities, telecom and energy indices gained up to 1.47 per cent.
However, consumer durables, realty, metal and auto indices fell up to 0.98 per cent.
Broader BSE midcap and smallcap indices ended up to 0.65 per cent higher.
On the global front, markets awaited cues from the US Federal Reserve's policy decision.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a negative note amid reports of a possible delay in the US-China trade deal.
Exchanges in Europe were trading on a mixed note in their respective early deals.
Meanwhile, the Indian rupee depreciated 6 paise to 70.91 against the US dollar intra-day.
Brent crude futures, the global oil benchmark, slipped 0.54 per cent to USD 61.26 per barrel.

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First Published: Oct 30 2019 | 5:00 PM IST

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