The BSE Sensex emerged from 4-month lows on Tuesday, gaining 54 points at 17,560 on strong buying in blue chips like RIL and Infosys at bargain levels, although overall investor sentiment remained jittery.
The Bombay Stock Exchange 30-scrip index, Sensex, started on a strong note and touched a high of 17,714.88, gaining over 208 points. Brokers said firm trends in Asia and Europe bolstered sentiment as global markets were off three-week lows.
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However, profit-booking towards the end of the session pulled the Sensex down to settle at 17,560.30, up 53.67 points or 0.31 per cent.
On Monday, it had plunged 364 points on investor fears that the government may levy capital gains tax on investments from Mauritius. Most of FDI and FII inflows into India are routed through that country, as investors make gains from a tax treaty between the two countries.
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Overall, in the previous four sessions, Sensex had tanked 802.03 points or 4.38 per cent.
The NSE 50-issue Nifty also recovered marginally by 17.95 points or 0.34 per cent to 5,275.85.
Sensex top heavyweight Reliance Industries, which had touched one year low in the past seven sessions, gained 1.67 per cent pushing up the markets. The stock finished at 848.50, up 1.67 per cent.
Software majors TCS and Infosys bounced back as well on institutional support, helping the BSE-IT index gain 1.16 per cent - the top winner from sectoral indices.
Meanwhile, IIFL's Head of Research Amar Ambani said, "Although the markets managed to overcome the anxiety over the Mauritius tax issue, the undercurrent remains jittery owing to a whole host of local cum overseas headwinds. One must be cautious at this juncture as things have become quite volatile."