Indian shares ended higher on Thursday, with Nifty reclaiming 11,00 levels after reports that the government is likely to roll-back recently imposed higher tax on foreign policy investors (FPIs).
The Sensex ended 637 points higher at 37,327 while the broader Nifty50 index surged 177 points to end the day at 11,032.
In the 2019 Union Budget, the government had proposed to increase the surcharge on the super-rich, which also increased the tax burden on FPIs. The Nifty has fallen over 6 percent since the July 5 Budget.
The sentiment was also lifted after the Reserve Bank of India’s (RBI) cut interest rates by 35 basis points to 5.4 percent on Wednesday, highlighting its concerns of slowing domestic economic growth.
Meanwhile, Asian shares rallied after China limited the fall in the yuan. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.8 percent.
In broader markets, the Nifty Midcap and Nifty Smallcap indices advanced 0.7 percent and 1 percent, respectively.
HCL Tech, Tata Motors, JSW Steel, Reliance Industries and BPCL were the top gainers on the Nifty50 index while only four stocks ended in red — Tata Steel, Cipla, Ultratech Cement, and Indiabulls Housing.
All sectoral indices were positive for the day. The Nifty Auto index gained the most, up 3 percent, followed by banking and financial indices. Nifty PSU Bank rose 1.7 percent while Nifty Bank was up 1.5 percent. Nifty IT and Nifty Realty added 1.8 percent each. Meanwhile, Nifty Metal and Nifty FMCG also gained over 1 percent each.
The Nifty Auto index was up 3 percent after industry executives met with government officials and sought tax cuts and easier access to funds to revive the ailing sector. Tata Motors, TVS Motor, Ashok Leyland, Mahindra & Mahindra, and Bajaj Auto were up between 3.8-5.6 percent.
The Nifty IT index gained 1.8 percent, tracking the stronger dollar after China’s move to set its official yuan below the key 7 to the dollar threshold for the first time since global financial crisis. TCS and Infosys rose between 1.5-2 percent.
HCL Technologies gained 7 percent and was the top index gainer on both the indices after it reported mixed performance for the June quarter, but maintained its growth guidance for FY20.
Tata Steel fell 4 percent after reporting a steep 64.3 percent year-on-year (YoY) decline in June quarter profit to Rs 693 crore amid muted revenue growth and subdued operating income.
Cummins India tanked over 7 percent after the company cut its full-year growth guidance amid the slowdown.
Aurobindo Pharma rallied 8 percent after June quarter earnings beat analyst expectations on all parameters. It reported a 39.5 percent year-on-year growth in June quarter net profit at Rs 635.7 crore driven by strong sales growth from the US, Europe, and antiretroviral businesses.