Nifty edges higher as government rethinks FPI tax surcharge

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BENGALURU (Reuters) – Indian shares rose on Friday after Reuters reported that the country may exempt the tax surcharge on foreign portfolio investors (FPIs), bringing cheer to investors.

The broader NSE Nifty was up 0.70% at 11,109.05 as of 0423 GMT, while the benchmark BSE Sensex rose 0.65% at 37,569.36.

India may exempt FPIs from the controversial tax on high incomes as Finance Minister Nirmala Sitharaman faces pressure to roll back the measures introduced during the last month, sources told Reuters.

The government estimates a total revenue loss of 4 billion rupees ($56.77 million) if it withdraws the higher taxes on FPIs, amid news of falling sales and job cuts among automakers and other manufacturers.

“The bounceback is happening because the finance minister has assured the industry of corrective actions,” said Deven Choksey, a promoter at KR Choksey Investment Managers.

“Obviously, this will slow down selling by foreign investors because they are the ones who have been relentlessly selling in the markets.”

Financials and real estate boosted indexes the most. The Nifty financial services index was up about 1%, while the real estate index rose 1.1%.

The banking index was up 0.8% and the auto index rose 0.3%.

Among shares, Indiabulls Housing Finance was the top gainer on the NSE index, rising 4.2%.

Hexaware Technologies rose as much as 8.6%, its biggest intraday percentage gain since June 21, after the company’s quarterly profit beat estimates.

Analysts at Macquaire said Hexaware’s strong performance during the quarter was mainly led by strong execution and margin recovery, and added that the company was poised to deliver an industry-leading organic growth rate.

Tata Motors was the biggest loser among the NSE stocks, falling 1.37%, after Mint reported here that the company was halting production for three days at its production plants in Pune and Jamshedpur.

The company’s luxury car unit Jaguar Land Rover, is also being shut temporarily, the report said.

Reporting by Derek Francis in Bengaluru; editing by Uttaresh.V

Our Standards:The Thomson Reuters Trust Principles.

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