The Nifty 50 reclaimed the 25,750 handle on Monday, rising in line with a broader Diwali-week rally that lifted the Sensex more than a thousand points as Reliance Industries and financial heavyweights advanced despite overnight weakness in Nasdaq technology names. Mumbai desks opened Tuesday balancing that momentum against weekend reports that the Securities and Exchange Board of India asked the finance ministry to remove the 12.5 percent long-term capital gains tax levied on foreign portfolio investors, a proposal that would directly address one complaint from sellers who have withdrawn more than Rs 2.9 lakh crore from Indian equities this calendar year.
Session mechanics
Index futures held above the 25,700 support band into the close, with call open interest stacking at the 25,800 strike according to weekly derivatives data cited by domestic brokers. IT majors lagged the headline index because of global AI-linked selloffs, but private banks and oil-to-telecom conglomerates compensated. Brent’s pullback toward lower triple digits eased import-cost fears for the rupee, which still traded near 95 to the dollar as the dollar index stayed firm above 101.
Tax headline versus flow data
Reuters cited people familiar with SEBI’s recommendation, which also floated mutual-fund tax relief when investors switch schemes. Jefferies and other global houses had already sketched scenarios ranging from uniform rate cuts to dollar-denominated gain calculations for FPIs. None of the proposals is law until the finance ministry and Parliament act; history suggests budget timing matters as much as regulator slides. Still, the headline gave short-covering fuel in mid-cap names that foreign funds had been exiting for six consecutive months.
NSDL-published flows show October sales of Rs 34,843 crore, on top of September’s Rs 35,857 crore. Domestic institutions partially absorbed that supply through systematic investment plans, but the net picture kept price-to-earnings multiples compressed relative to 2024 peaks.
Levels traders cite
Technical strategists marked 25,800–25,900 as the next resistance cluster, with 25,400 as near support if global tech volatility returns. Results from ITC, Marico and state-owned miners due Tuesday add stock-specific catalysts inside the index. For now the story is dual: festive liquidity lifting the tape, and policy chatter attempting to speak to foreign sellers who have already voted with their tickets.
Banking and ADR cross-read
Private bank ADRs listed in New York traded flat in overnight sessions, suggesting foreign investors want clearer tax language before adding India beta through dual-listed names. Domestic mutual funds reported steady SIP registrations in October, providing the absorption layer that kept mid-cap indices from gap-down opens despite FPI selling.