Hopes of fresh tax reforms, steps to revive demand and positive global cues lifted stocks on Tuesday, with benchmark equity indices gaining nearly 1.5%.
The BSE Sensex rose 581.64 points, or 1.48%, to 39,831.84, while the National Stock Exchange’s 50-share Nifty index gained 159.70 points, or 1.37%, to 11,786.85.
The Prime Minister’s Office (PMO) and the finance ministry are discussing the abolition of the dividend distribution tax (DDT), a review of tax slabs and a change in the holding period of assets to be eligible for tax savings, news agency IANS reported.
The report also said the securities transaction tax and the tax on long-term capital gains above Rs 1 lakh introduced in the 2018 budget were under review.
While budget proposals are prepared by individual ministries, the final call on significant proposals is a political one at the highest level.
Most Asian markets rose on Tuesday after the Wall Street hit a record on Monday amid hopes of progress in Sino-US trade talks and for another dose of policy stimulus from the Federal Reserve this week.
In Japan, the Nikkei rose 0.47% and the Topix gained 0.86%, while South Korea’s Kospi closed slightly lower.
“This positivity is likely to stay in the short to medium term as concerns of the market are fading with a tax cut and the government’s intention to come out with more reforms in direct and indirect taxation. Clouds over the global market are gradually settling down, with developments in trade deal and Brexit, while rate cut expectation from the US Federal Reserve will further add impetus to emerging markets like India,” said Vinod Nair, head of research at Geojit Financial Services Ltd.