Indian equities rally as Sensex gains over 900 points, Nifty crosses 23,700
The Sensex rose more than 900 points and the Nifty 50 topped 23,700 on Tuesday, driven by easing oil prices, hopes of a long-term capital gains tax review and continued foreign inflows.
Indian stock markets posted strong gains on Tuesday, with the Sensex climbing over 900 points and the Nifty 50 moving above the 23,700 mark. The rally added roughly Rs 4 lakh crore to the total market capitalisation of listed companies, taking it to about Rs 486 lakh crore.
Shares of IndiGo and HDFC Bank led the advance, each rising around 3%, while UltraTech Cement, Hindustan Unilever, Asian Paints, Bajaj Finance, Bajaj Finserv and Infosys posted gains of about 2%. Reliance Industries fell just over 1% after a 12% surge the previous session.
Sector indices such as Nifty Auto, Financial Services, FMCG, IT and Private Bank all rose more than 1%, whereas Nifty Pharma slipped into negative territory. Smaller-cap indices also posted modest gains, and the market breadth remained firmly in favour of buyers, with more than 2,400 stocks advancing.
Key factors cited for the uplift include:
Finance Minister Nirmala Sitharaman said the government would "consider" foreign investors' request to review long-term capital gains (LTCG) tax structures, noting that circumstances have changed and the voices of concern are louder.
Analysts see the prospect of a LTCG tax revision as a potential catalyst for foreign inflows, especially into banks, energy firms and other large-cap stocks.
Oil prices continued to ease, with Brent crude trading below $105 per barrel and WTI under $97, after earlier peaks around $110. The lower energy costs are expected to support both the rupee and equities.
Foreign Institutional Investors (FIIs) remained net buyers, purchasing shares worth nearly Rs 3,115 crore on Monday, according to provisional NSE data, reversing a period of net selling in September and early October.
The rupee appreciated 0.26% to open at 94.66 per US dollar, aided by the softer oil market and expectations of stable diplomatic conditions.
Analysts also highlighted attractive valuations in large-cap stocks after a broad correction, with Jefferies' Mahesh Nandurkar noting an improving risk-reward profile for large caps relative to mid-caps.
V K Vijayakumar, chief investment strategist at Geojit Investments, said the combination of lower crude prices, weaker AI-related trade concerns, solid Q2 earnings and continued FII buying creates conditions that could sustain the rally.
Technical outlooks suggest the Nifty could test the 23,500-23,800 range, though some analysts caution that a firm close above 23,300 would be needed to confirm further upside.