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Sensex, Nifty recover after report says government discussing FPI surcharge

File photo of Bombay Stock Exchange (BSE) building in Mumbai. Photograph:( Reuters )

Reuters Bengaluru, Karnataka Aug 02, 2019, 04.05 PM (IST)

Indian shares reversed course and ended higher on Friday, led by gains in IT and auto stocks, after a media report said the government was discussing the tax surcharge on foreign portfolio investors (FPI) and its impact on markets.

India had proposed to increase taxes on those with annual incomes of more than 20 million rupees ($287,387.29) in its annual budget last month, which rattled many FPIs. Foreign investors took out $1.8 billion from Indian equities in July.

Markets, however, ended in the red for the week as weak earnings and comments around the US Federal Reserve's future rate cuts and Washington's tariffs on China clouded investor sentiment.

The broader NSE Nifty ended 0.16 per cent higher at 10,997.35, while the benchmark BSE Sensex closed up 0.27 per cent at 37,118.22. For the week the NSE Nifty was 2.5 per cent lower and the BSE Sensex was down 1.88 per cent, recording their worst weekly fall in three weeks.

Auto stocks led gains for the day with the sector's index closing up 1.26 per cent. Maruti Suzuki closed up 2 per cent, while Tata Motors was up 1.3 per cent.

IT stocks were also the top boosts to markets. The Nifty IT index was up 0.6% led by gains among heavyweights Tata Consultancy Services, which closed 1.24 per cent higher and Infosys Ltd, which was up 1.3 per cent at the closing bell.

Among losers, Indiabulls Housing Finance ended down 7.3 per cent, while Tata Steel closed 2.8 per cent lower.

The volatility index was 4.33 per cent higher at the close.

Story highlights

Markets ended in the red for the week as weak earnings and comments around the US Federal Reserve's future rate cuts and Washington's tariffs on China clouded investor sentiment.