Sensex Nifty up: On October 13, both the major indices Sensex and Nifty registered a spectacular gain of over 1.5 percent. The Sensex crossed the 73,000 mark with an increase of 1109 points. While the Nifty rose 358 points to close at 22,722. Till 3 pm, a total of 2,068 stocks were trading with gains, while 1,865 stocks declined and 179 stocks remained unchanged. Finance Minister Nirmala Sitharaman’s positive comments were the main reason behind this tremendous market rally. Along with this, value buying at low levels also provided strong support to the market.

Investors have high hopes on LTCG tax

Speaking at the Bloomberg New Economy Forum held in New Delhi, Finance Minister Nirmala Sitharaman expressed her views on several important issues. He made it clear that the government is fully prepared to listen to views regarding removal of Long Term Capital Gains (LTCG) tax during the upcoming budget discussions. In fact, foreign and domestic investors have long been raising questions about equity taxation. On this, the Finance Minister said that there is a lot of discussion going on in the market on Security Transaction Tax (STT). Whether all asset classes should be treated equally is also hotly debated. He termed this discussion as very healthy for the market. As for the current rules, listed equity shares held for more than 12 months are taxed at 12.5 per cent, with Rs. Profit up to 1.25 lakhs is tax free. The hint of a change in these rules filled the market with excitement.

Heavy buying came back in IT shares

Apart from this, the performance of IT companies was the best in boosting the market. The Nifty IT index rose 4 percent. Major stocks like TCS, Tech Mahindra and HCL Tech were among the top gainers with gains of 2 to 5 percent. Shares of HCL Tech rose 4.9 percent in early trade. This was due to the excellent quarterly results of the company. The company’s net profit increased by 21.2 percent to Rs. 5,132 crore, which is more than the market expectations. The company’s annual revenue from advanced AI services also increased to $219 million. Brokerage firm Jefferies has upgraded the stock considering the stable outlook of the company. According to Dharmesh Kant of Cholamandalam Securities, earnings worries for IT companies seem to be over.

Technical aspects of the market

There are some strong technical reasons behind this rally in the stock market. After the decline in the market, investors did a lot of value buying. The Nifty realty index rose over 1 percent. The FMCG sector also showed a good recovery, with Hindustan Unilever up 1.2 percent and ITC up 0.4 percent. Apart from this, the India VIX, which measures market volatility, fell 7.5 percent to 14.12. This is a clear indication that there is no major threat of a short-term sell-off at present. Gaurav Udani of ThinCrew Securities says that if the Nifty holds the support zone of 22,350 to 22,400, the market may move towards 22,600. Pavitro Mukherjee of Bajaj Broking said that the market is currently trading in the range of 22,180 to 22,650. A major bounce can be expected only after crossing the 22,650 level.

Massive investment is coming in new sectors

Apart from the stock market, the finance minister also spoke in detail about the country’s infrastructure. He said that private capital is now coming in rapidly in areas like renewable energy, data centers, green hydrogen and green ammonia. India has moved towards becoming a global hub not only in AI but also in semiconductor chip designing. The government has decided to manufacture advanced and less advanced chips. Institutions like National Bank for Financing Infrastructure and Development (NaBFID) and National Investment and Infrastructure Fund (NIIF) are playing an important role in infrastructure development.