Stock market rally today: BSE Sensex and Nifty50 continued their winning on Tuesday after the stock market hit a 7-week closing high in the previous session. Softer oil prices, rising expectations of a possible review of the long-term capital gains (LTCG) tax structure and other supportive factors lifted investor confidence, leading to both major indices rallying over 1%.At 1:30 PM, Nifty50 was trading at 23,724.00, up 283 points or 1.21%. BSE Sensex was at 76,722.16, up 1,029 points or 1.36%. The rally added nearly Rs 4 lakh crore to the combined market capitalisation of companies listed on the BSE, taking the total to Rs 486 lakh crore.IndiGo and HDFC Bank led the Sensex gainers, with both stocks advancing around 3%. UltraTech Cement, Hindustan Unilever (HUL), Asian Paints, Bajaj Finance, Bajaj Finserv and Infosys also rose by approximately 2% each. Reliance Industries was among the notable laggards, declining a little over 1% after recording a historic 12% jump in the previous session.V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited says that circumstances are ideal for the continuation of the ongoing market rally.“Decline in Brent crude to $104, further weakening of the AI trade, continuing flow of good Q2 results and FIIs turning buyers have potential to accelerate the ongoing rally. The 11.6% surge in a mega cap stock in one day is very rare. But this happened in RIL yesterday. Huge delivery based buying of around Rs 6413 crores, supported by excellent Q2 results, triggered massive short covering in the stock. Massive value buying along with big short covering leads to such sharp surges in stocks, even in megacaps. The takeaway from this experience is that patient value buying will be rewarded. It is possible that there are short positions in many quality large-caps. These are short-positions created by bears on expectations of continued FII selling. The circumstances are changing,” he says.“While the AI trade has slightly weakened, it is important to understand that this is only a correction, not yet a crash. Results of many AI companies continue to be good. So watch out for the trends in this segment. Results of the US mid-term elections due tomorrow and its impact on geopolitical dynamics will be keenly watched by the market in the coming days,” he adds.
Why is the stock market rising today? Top reasons
Expectations of an LTCG tax review gather momentumHopes of a possible change in the taxation of equity capital gains gained traction after Finance Minister Nirmala Sitharaman said on Monday that the government would “consider” foreign investors’ request for a review of the tax structure.“The circumstances have changed and, therefore, the voices of concern are louder,” she said at a media event, referring to reports that her administration had received suggestions to reconsider the levies on long-term capital gains (LTCG) for overseas investors.“I quite appreciate that. So, I’ll consider all this… Our growth is very important; where people are putting their very best, we are able to see sustained 7(%)-plus growth.”In a recent report, Jefferies said a potential reduction in LTCG tax could encourage foreign investors to return to the Indian market, which they have been steadily moving away from.Oil pricesCrude oil prices edged up marginally on Tuesday morning but continued to trade significantly below the levels of around $110 per barrel recorded in recent weeks. Brent crude futures stayed below $105 per barrel, while WTI crude futures remained under $97 per barrel.AI-related trade loses momentumApple announced its July-September quarter results on Monday, reporting earnings that exceeded expectations. The iPhone maker recorded a “revenue record”, supported by sales of iPhones and growth in services revenue. However, higher expenses associated with artificial intelligence have raised concerns about pressure on profit margins.Apple CFO Kevan Parekh cautioned that gross margins in the final part of the year would moderate slightly from the 47.9% reported for the September quarter.“We expect gross margin to be between 45% and 46%. This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI,” Parekh said.Indian equities, meanwhile, are increasingly being viewed as an ‘Anti-AI’ trade. Consequently, concerns that the AI-driven market frenzy could lose steam are often seen as a positive for Dalal Street.Foreign investor buying provides supportForeign institutional investors (FIIs) continued to purchase Indian equities on Monday, recording net buying of nearly Rs 3,115 crore, according to provisional NSE data. The buying follows a period of heavy selling that had unsettled the domestic market.FIIs were net sellers through September and the first half of October. The trend reversed in the latter half of October, with foreign investors returning to buying. Their purchases have continued into November, offering some relief to market bulls.Rupee strengthens against the dollarThe rupee opened 0.26% higher at 94.6550 against the US dollar on Tuesday, compared with its previous close of 94.90.Commenting on the currency’s outlook, Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, said, “With the US election date approaching, markets will closely monitor whether the administration maintains this diplomatic stance or geopolitical tensions resurface. Lower crude prices could provide near-term support to the domestic currency. The rupee is expected to trade in a range of 94.50–95.25. “(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
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