Sensex soars over 900 points, Nifty gains 271 on global optimism; Tax reforms fuel FII interest

The Sensex's sharp rebound and Nifty's uptick on June 12 reflect global optimism and a policy pivot designed to attract foreign investment. In New Delhi, the benchmark BSE Sensex opened at 74,742.65 points, advancing 910.10 points or 1.23 percent, while the NSE Nifty 50 began at 23,432.70, up 271.10 points or 1.17 percent. Banking and market analyst Ajay Bagga highlighted a structural shift in foreign institutional investor debt flows after the June 5 ordinance that eliminated the 12.5% long-term capital gains tax and the 20% withholding tax on interest income for FII investments in government securities. He added that the 10-year sovereign yield is now fully tax-exempt and could attract up to USD 50 billion over the next two years, a shift analysts say could lower sovereign borrowing costs and bolster rupee support. Global cues followed a positive Asian close, with GIFT NIFTY at 23,464.00, up 0.26%, and major regional indices rising, including the Nikkei 225 above 66,230. The Hang Seng gained 2.05% to 24,747, and the Taiwan Weighted rose 2.41% to 44,187.41, while in the United States, the Nasdaq climbed 2.5% on tech and AI optimism. Commodities cooled as Brent crude fell 1.48% to USD 89.04 per barrel and U.S. crude slid 1.42% to USD 86.46 per barrel, underscoring a broader risk-on backdrop despite lingering inflation and policy uncertainty.