Both the BSE Sensex and Nifty50 posted gains exceeding 1% during afternoon trading on Tuesday, with each benchmark climbing through the session. Finance Minister Nirmala Sitharaman's remarks on long-term capital gains tax and the securities transaction tax, alongside a broad rally in IT shares and several other contributing factors, lifted investor sentiment across the trading session.

Trading wrapped up with the BSE Sensex at 73,033.78, a gain of 1,109 points that translated to a 1.54% advance on the session. The Nifty50 index settled at 22,721.95, a gain of 359 points that translated to a 1.60% advance on the day. Gains across listed equities pushed the aggregate value of shares on the exchange up by Rs 4.12 lakh crore, bringing the overall market capitalisation figure to Rs 470 lakh crore.

Technology-sector stocks drove the advance among Sensex-listed shares. Quarterly earnings disclosures sent HCL Tech stock up by more than 5%, with TCS posting a gain of roughly the same magnitude. Shares in both Tech Mahindra and Infosys moved upward by around 3 percentage points apiece.

Consultations on long-term capital gains tax and the securities transaction tax have been taking place across both domestic and international forums, Finance Minister Nirmala Sitharaman told reporters on Tuesday. At the Bloomberg New Economy Forum, she told attendees that feedback on the LTCG tax had been coming in from investors based both inside India and abroad. The question of whether a transaction tax should apply uniformly across different asset classes had received considerable discussion, she noted, yet she stopped short of indicating which direction any policy changes might take — pointing out that budget preparations were already under way and that it would be premature for her to outline what options were or were not on the table.

SBI Research's Ecowrap publication put forward a case for abolishing the long-term capital gains tax on equities, with the research arm contending that extended holding periods among investors could follow from such a policy change.

Technology shares carrying the heaviest market weightings posted gains that pulled the wider index upward. A pullback in AI-related equities on world markets lifted the mood around India's well-established technology firms. Losses on Asian equity markets included a drop of more than 6% for South Korea's Kospi and a retreat of over 2% for Japan's Nikkei. Technology shares, Samsung among them, retreated as questions mounted about whether enthusiasm for the emerging sector had outpaced its actual foundations.

Trading in early Tuesday sessions saw the rupee add 82 paise against the US dollar, pushing the exchange rate to 94.96 and continuing a run of gains that followed policy steps taken by the Reserve Bank of India. Updated guidance from the Reserve Bank of India, published on Monday, drew a clear boundary around how overseas clients may use rupee non-deliverable derivative contracts — limiting that access to hedging activity alone. A 20% cash reserve requirement was stretched to cover rupee currency hedges held by the banks themselves.

Four policy steps unveiled by the central bank on a single Saturday — a dedicated dollar supply channel for three state-owned oil companies, tighter curbs on foreign exchange derivatives, a 20% cash reserve requirement applied to certain currency contracts, and revised daily reserve thresholds across the banking sector — together form the context in which analysts see a plausible easing of spot-market pressure and a potential dampening of speculative dollar demand, factors that could lend the currency a measure of near-term stability.

Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, noted that a durable rebound would hinge on foreign institutional investor activity, the direction of crude oil prices, and how the dollar performs across broader markets.

Treasury yields retreated from the multi-year highs they had recently touched. Benchmark rates for US government debt eased on the day, with the 10-year note settling just under 5.2% and its 30-year counterpart pulling back to 5.56%. Rates on two-year US Treasury notes dipped under the 4.8% mark.

On Tuesday, traders factored in the prospect of expanded Russian petroleum output entering world markets, pushing benchmark crude prices lower. Trump took to the podium to justify his administration's move to ease curbs on Russian diesel imports on a short-term basis. Brent crude contracts hovered around the $105-per-barrel mark after shedding more than one percent of their value, with WTI futures likewise retreating past the $93 threshold by a comparable margin.