Markets vault as Chidambaram steps in to ease liquidity woes
21 Sep 2012
The government today announced a slew of measures, including slashing of the withholding tax on overseas borrowing by local companies to 5 per cent from 20 per cent and granting approval to overseas borrowings by way of loan agreement and long-term infrastructure bonds that satisfy certain conditions, giving a big push to markets and investor sentiment.
While the markets rose by more than 400 points, the rupee also rose to its highest level in over four months today after the government announced new steps over and above the diesel price hike and measures to boost foreign investment flows notified yesterday.
The benchmark BSE sensitive index closed 403 points or 2 per cent higher from yesterday's close at 18,752.83 points, its highest in over a year.
The NSE Nifty closed 22.75 points (0.41 per cent) higher at 5,577 on Friday.
The rupee was at 53.60/63 against the dollar, up around 80 paise from its Thursday close of 54.385/395 a dollar.
The government today announced a significant reduction in the withholding tax on overseas borrowing by local companies to 5 per cent from 20 per cent, allowing local companies greater access to cheaper overseas funds.