Sensex rallies 394 points as govt sets up panel to look into tax issues; rupee recovers

Indian equity markets today reversed the three-day declining trend and rallied more than 300 points after the government set up a panel to look into the taxation issues of FIIs and also short covering by investors. At 10:24 am, the Sensex was up 394 points ot 1.5 percent at 26,992.94 and Nifty up 110 points or 1.4% at 8,167.70. However, experts are do not expect the rally to sustain as the markets likely to get jittery ahead of the release of US jobs numbers, a key data that indicates the health of the economy. In tandem with the equity markets, the rupee also recovered by 15 paise to 64.08 against the US dollar in early trade. Forex dealers said besides a strong recovery in the domestic equity, fresh selling of the dollar by exporters and banks also supported the rupee. The Indian equities also got a boost from firming up trend in the global markets. The rally was lead by realty, banking, capital goods, auto and healthcare stocks. The 50-share NSE Nifty regained the 8,100-mark by rising 111.55 points or 1.38 per cent to 8,168.85. [caption id=“attachment_2234098” align=“alignleft” width=“380”]  Reuters[/caption] Brokers said sentiments were buoyed after Finance Minister Arun Jaitley yesterday announced that a high-level committee will look into the controversial issue of Minimum Alternative Tax (MAT). The tax demand on the FIIs had created considerable heartburn among investors who pulled out from Indian markets over the last three days, bringing the index down 891 points. The rupee also declined below the the 64-mark to end at 20-month low of 64.23 yesterday. Prominent gainers on the Sensex today are Tata Motors, Maruti Suzuki, ICICI Bank, Hindustan Unilever, HDFC, HDFC Bank, Dr Reddy’s, Cipla, BHEL, Axis Bank, Bharti Airtel, ONGC and L&T. However, Hero MotoCorp was down 2.86 percent after the company reported a 14.05 per cent decline in net profit for the fourth quarter. In other Asian markets, Hong Kong’s Hang Seng was up by 0.90 per cent, while Japan’s Nikkei gained 0.31 per cent in early trade today. The US Dow Jones ended 0.46 per cent higher in yesterday’s trade. With inputs from PTI