Sensex spurts 346 points on no P-note tax

Written by fe Bureau | Mumbai | Updated: Mar 31 2012, 08:25am hrs
The finance minister gave a big relief to foreign investors on Friday. He ruled out any potential tax liability in the country for foreign investors who use the participatory note (P-note) route to access Indian stocks. Responding to this, the markets saw hectic buying, and the Sensex shot up 346 points.

The Sensex, which had lost 200 points in the last two sessions, bounced back 345.59 points or 2.03% to 17,404.20 on revival of buying by foreign funds. The NSE 50-issue index Nifty climbed 116.70 points, or 2.25% to 5,295.55, after testing 5,300 level during the session.

Trading sentiment turned bullish after finance minister Pranab Mukherjee clarified that FIIs investing in stocks through participatory notes (P-notes) will not have to pay taxes in India. This route is used by foreign investors to pick up Indian equities through overseas funds registered in the country.