Sensex jumps over 1,100 points, best day in six months, after Sitharaman remarks on capital gains tax

Indian shares posted their strongest single-day gain in six months on Tuesday, 13 October, as comments by Finance Minister Nirmala Sitharaman on the taxation of equities lifted sentiment in the final hour of trading.

The BSE Sensex rose about 1,109 points, or 1.54%, to close above 73,000. The NSE Nifty 50 gained roughly 359 points, or 1.6%, to end near 22,722. According to Upstox, it was the Sensex's biggest one-day rise since late March.

What the Finance Minister said

Speaking at a Bloomberg event in New Delhi, Sitharaman said many people were commenting on long-term capital gains (LTCG) tax and that it was healthy to have such a debate, adding that she would be keen to hear those views. She also noted that preparations for the next Budget had only just begun, so it was not the right time to say what she would or would not consider.

Investors in India and abroad have raised questions about equity taxation, including LTCG tax and the securities transaction tax (STT). Brokerage Motilal Oswal, quoted by Business Standard, pointed out that no formal proposal has been announced.

IT stocks lead

Technology shares were the standout performers. The Nifty IT index climbed more than 5%, helped by strong second-quarter results from HCLTech. HCL Technologies, TCS, Shriram Finance and Tech Mahindra were among the top Nifty gainers, while Kotak Mahindra Bank, Eternal, Maruti Suzuki and Max Healthcare were among the laggards. The Nifty Midcap 100 rose about 1.1%.

Fintech stocks such as Paytm's parent One 97 Communications recovered from early losses after the National Payments Corporation of India deferred the rollout of merchant charges on some UPI payments.

What to watch

Crude oil prices remain elevated because of the conflict in the Gulf, with Brent trading above $100 a barrel, which continues to weigh on the outlook for an oil-importing economy like India. Traders will also track further second-quarter earnings and any follow-up comments from the government on capital gains tax. Market moves are not investment advice.