Sensex shoots up 346 points high

Mumbai: After two-day decline, the BSE Sensex shot up 346 points to two-week high of 17,404.20 on Friday as the government clarified that funds investing in Indian equities via P-Notes will not have tax liability in the country. Besides, the rupee`s recovery from 11-week lows and firm global markets lifted investor mood.

Investors have been worried, among other things, over reports that the government may tax P-Notes — instruments that allow FIIs, which are not registered with market regulator SEBI, to invest in the Indian equity market. Clearing the air on the issue, Finance Minister Pranab Mukherjee said, "Indian tax authority would not go beyond financial investor (FIIs) to check the details about the P-Note holders. Accordingly, a question of liability for tax in India of the P-Note holder would not arise. Necessary clarification will be issued."

The comment triggered buying across-the-board and all the 13 sectoral indices closed with gains. Besides, 28 of the 30 Sensex scrips closed with gains. Top two Sensex heavyweights, RIL and Infosys, added nearly 100 points to the surge. ICICI Bank, HDFC Bank, L&T, TCS and Tata Steel attracted good buying.

The Bombay Stock Exchange resumed higher and remained in the green zone throughout the session. It settled at two-week high of 17,404.20, up 345.59 points or 2.03 per cent. In last two days, it had fallen 198.75 points or 1.15 per cent. Similarly, the NSE 50-issue index Nifty moved in a range of 5,307.10 and 5,203.65 before concluding at 5,295.55, showing a net gain of 116.70 points or 2.25 per cent.