FM's LTCG remarks, IT rally power 1,100 point Sensex rally; Nifty ends above 22,700

Benchmark indices S&P BSE Sensex and NSE Nifty 50 rallied on Tuesday, with IT stocks leading the gains after a sharp rise in heavyweight technology shares. Finance Minister Nirmala Sitharaman's remarks on long-term capital gains (LTCG) taxation also lifted sentiment, as investors hope for a possible review of the tax regime.

The Sensex rose 1,109.10 points, or 1.54%, to close at 73,033.78. The Nifty 50 gained 358.60 points, or 1.60%, to settle at 22,721.95.

IT stocks lead gains

HCLTech was the top Nifty 50 gainer, surging 8.42%. Tata Consultancy Services (TCS) rose 6.79%, while Tech Mahindra gained 4.93% and Infosys advanced 4.13%. Shriram Finance also climbed 6.31%.

The gains in IT stocks helped drive the broader market higher. The Nifty Financial Services index rose 1.46%, the Nifty Auto index advanced 1.23% and the Nifty Bank index gained 1.03%.

FM's remarks fuel tax hopes

The finance minister's comments on LTCG taxation added to the positive mood in the market. Speaking at the Bloomberg New Economy Forum in New Delhi on Tuesday, Finance Minister Nirmala Sitharaman said the government would be “keenly hearing views” on the review of long-term capital gains (LTCG) tax. She acknowledged that investors in India and abroad had raised the issue, while noting that market participants had also questioned the treatment of different asset classes under the securities transaction tax (STT).

However, she did not commit to any changes in LTCG tax, short-term capital gains (STCG) tax or STT, saying it was too early to indicate what the government might consider as preparations for the next Union Budget had begun.

Rupee strengthens

The Indian rupee appreciated 48 paise to close provisionally at 95.30 against the US dollar.

The India VIX, a measure of expected market volatility, fell 7.94% to 14.04, pointing to a decline in near-term volatility expectations.

Despite the broad-based rally, some Nifty 50 stocks ended lower. Kotak Mahindra Bank fell 0.99%, Eternal declined 0.79%, Maruti Suzuki lost 0.62% and Max Healthcare slipped 0.57%.