Mumbai: The BSE Sensex showed smart recovery on Tuesday after CNBC-TV18, citing unnamed finance ministry officials, reported the government would not target the participatory notes under its newly proposed General Anti-Avoidance Rule (GAAR).
Overall the day was quite choppy ahead of F&O expiry on Thursday. The 30-share BSE Sensex rose 227.28 points or 1.33 per cent, to close at 17,280.06 after hitting an intraday high of 17,366.84 and low of 17,061.16.
Finance ministry sources say, only participatory notes which fail certain regulatory tests may be subject to taxation.
Aliff Fazelbhoy, partner - tax, M&A and employment, ALMT Legal, said that it was not the government's intention to tax P-notes but advised caution until it was spelt out.
Meanwhile, the NSE's 50-share Nifty rallied 58.90 points or 1.14 per cent to 5,243.15, helped by the rising rupee, short covering post yesterday's sharp fall and the global cues.
Jason Hughes of IG Markets tells CNBC-TV18 that Indian equities look attractive around the 5200 level on the Nifty.
The Indian rupee appreciated by 58 paise to 50.69 a dollar today after falling in previous sessions, which suggests that foreign institutional investors may have stepped in to buy their favourite stocks. The 8.79 per cent 2017 bond yield spiked further by 0.5 per cent to 8.52 ahead of announcement of government's borrowing programme this week.
Cigarette major ITC rose 1.8 per cent and FMCG company Hindustan Unilever shot up 3.5 per cent.
Country's largest lenders State Bank of India and ICICI Bank were up 0.7-1 per cent while rival HDFC Bank was up 1.5 per cent. Housing finance company HDFC moved up 2.2 per cent.
Shares of Sterlite Industries, Cipla and DLF topped the buying list, rising 3.5-4.5 per cent.
Engineering and construction major Larsen & Toubro, telecom company Bharti Airtel and top commercial vehicle maker Tata Motors rallied 2-3 per cent.
Index heavyweights Infosys and ONGC were up 1-1.8 per cent. Tata Consultancy Services, India's No. 1 software services exporter rose 0.9 per cent.
However, shares of Maruti Suzuki, country's largest car maker fell 2 per cent after Maharashtra government imposed 4 per cent tax on diesel cars and 2 per cent on petrol cars. State-run BHEL was down 1 per cent.
Declining shares outnumbered advancing by 841 to 593 on the National Stock Exchange. Total traded volume was more than Rs 2.42 lakh crore.
Global markets gained after comments over US economy by Fed chairman Ben Bernanke on Monday. Asian markets closed 0.8-2.4 per cent higher barring Shanghai while European markets were moderately higher.
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