Indian Stock Market Recovers Amid Tax Easing for Foreign Investors

Market Recovery and Key Developments

On Thursday, the Indian stock markets experienced a notable rebound from earlier losses, driven by value buying and new government directives aimed at relaxing tax regulations for foreign investors in government securities. Investors remained cautious as they awaited the Reserve Bank of India's policy announcement scheduled for Friday. Initially, the Sensex had plummeted by 538.87 points, or 0.72%, settling at 73,807.30, while the Nifty index fell by 158.3 points, or 0.67%, to 23,247.30. However, during intraday trading, the Sensex managed to rise by 186.95 points, or 0.25%, reaching 74,533.12, and the Nifty climbed to 23,459.75, up by 54.15 points, or 0.23%. By the end of the trading session, the Sensex closed slightly higher at 74,360.01, gaining 13.84 points, or 0.02%, while the Nifty finished at 23,416.55, up by 10.95 points, or 0.05%.

Shares of Rajesh Exports Ltd, a jewellery exporter based in Bengaluru, faced significant selling pressure, dropping 5% and hitting the lower circuit limit following a SEBI investigation into alleged financial misrepresentation amounting to approximately Rs 15.15 lakh crore. Read More: 'No Over Stating Of Revenues, Some Communication Gap': Rajesh Exports On Rs 15.15 Lakh Crore Fraud

The Indian Rupee traded slightly lower, depreciating by about 0.10% to around 95.77. In sector performance, IT and Metal stocks were the only ones to lag behind. The decline in Brent crude prices, which fell by 0.97% to USD 96.86 per barrel, is viewed positively for the Indian economy. Additionally, reports indicating that India plans to eliminate capital gains tax on foreign portfolio investments in government securities have further bolstered market sentiment.