Indian equity indices in smart recovery mode

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) began the day's session at 26,814.38 points, against the previous day's close at 26,599.11 points.

Mumbai, May 8 :  Key Indian equity indices were in a smart recovery on Friday after crashing to the lowest level in months the previous day, with the mood lifted by government assurances that it will seek advice from a committee to look at the issue of retrospective tax on capital gains. (Read: India to achieve highest GDP growth over next 8 yrs, overtake China: Harvard study)

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) began the day’s session at 26,814.38 points, against the previous day’s close at 26,599.11 points.  By around 1:00 p.m., after a steady upward climb, it was hovering around 27,108.08 points, with a gain of 508.97 points, or 1.91 percent.

At the National Stock Exchange (NSE), the broader, 50-share Nifty was ruling at 8,201.90 points, with a gain of 144.60 points, ot 1.79 percent. At the Mumbai bourse, all but two shares that go into the 30-share Sensex were in the green. Among the 12 sector-specific indices, 11 were in the green and only consumer durables was in the negative territory.

The mood was evidently lifted by the government assurances to remedy its taxation policy.  Finance Minister Arun Jaitley on Thursday said in parliament the ministry has referred the issue of minimum alternate tax dispute with foreign funds to a panel headed by Law Commission chairman A.P. Shah, and has requested early suggestions.

There was external support for market sentiments as well. The US markets also recovered from the losses in last couple of trading sessions and closed in the positive territory on Thursday. So was the case with some of the Asian peers during the morning trading sessions on Friday.

The Sensex fell for the third straight day on Thursday by 118.26 points, or 0.44 percent, to a six-and-half month low, as uncertainties over tax policies, rising crude oil prices and falling value of the rupee that touched a 20-month low continuing to rock the mood. In the process, the Sensex closed at its lowest level since October 21 last year and the Nifty at its lowest level since December 17.  On Wednesday, the Sensex crashed 722.77 points, or 2.63 percent, while the day before it fell 50.45 points, or 0.18 percent.