Sensex Jumps Over 1,100 Points, Rupee Rallies. Why Markets Went Up Today
Indian stock markets on Tuesday saw a sharp rebound after a streak of losses, backed by a strong rupee, a rebound in IT, financial and consumer goods stocks, and remarks by Union Finance Minister Nirmala Sitharaman over capital gains tax.
Sensex and Nifty both surged over 1.5 per cent each, posting their best performances in months.
The 30-share BSE Sensex jumped 1,109.10 points, or 1.54 per cent, to settle at 73,033.78. During today's trading session, it rose 1,120.99 points, or 1.55 per cent, to mark a day's high of 73,045.67.
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NSE Nifty also rose 1.6 per cent, or 358.6 points, to close at 22,721.95. The 50-share index logged a day's high of 22,721.95.
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The broader markets, including Nifty Midcap 100 and Nifty Smallcap 100, also erased their day's losses and turned green during close.
The sharp rebound added Rs 4 trillion to investors' accounts.
IT stocks were the biggest gainers of the day, with stocks of HCL Tech jumping 8.28 per cent over strong July-September quarter results. Tata Consultancy Services surged 6.59 per cent, Tech Mahindra jumped 4.90 per cent and Infosys was up 4.44 per cent.
HUL, Titan, Bajaj Finserv, SBI, HDFC Bank, M&M and ICICI Bank were the other biggest gainers of the day.
Why Sensex And Nifty Rebounded Today
A number of reasons fuelled today's market rally.
1. IT Stocks Lead On Strong Q2 Earnings:
IT stocks were among the key drivers of the rally, with the Nifty IT index closing over 5 per cent higher. The stocks gained over strong Q2 results posted by HCL Tech a day earlier, improving investors' mood amid concerns over AI taking over the IT market.
2. Nirmala Sitharaman's Remarks:
Finance Minister Nirmala Sitharaman on Tuesday said that there is a lot of ongoing debate on long-term capital gains (LTCG) tax and STT. She also stated that it is healthy to have this debate and she will be keenly "hearing them". She said LTCG tax, STT and the taxation of different asset classes remained important subjects of discussion among investors. This gave investors hope about possible relaxations on capital gains taxes, which had been revised during the Union Budget in 2025.
3. Rupee Rebound:
The rupee strengthened for the third straight session on Tuesday and appreciated 40 paise to close at 95.38 (provisional) against the US dollar. The rupee has been on an upward streak following the Reserve Bank of India's (RBI) steps aimed at mitigating spot dollar demand and curbing excessive positioning in the foreign exchange market.
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4. IMF Upgrade:
The International Monetary Fund (IMF) on Tuesday pegged India as the fastest-growing major economy with a growth rate of 7 per cent, improving investor mood despite retail inflation shooting up the previous day.
5. Oil Prices Drop:
Oil prices edged lower on Tuesday after climbing by nearly $2 in the previous session. Brent crude fell about 1.65 per to around $104.89 a barrel, though the prices remain elevated amid tensions in the Middle East.
Globally, markets posted a mixed performance on Tuesday. South Korea's Kospi tanked 5.46 per cent, while Japan's 225 index also ended lower. Shanghai's SSE Composite index and Hang Seng index settled in green.
US markets ended mostly lower on Monday. Meanwhile, European markets were in the positive territory.
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