Indian benchmark indices erased opening gains and traded flat in a volatile session on June 5 as investors weighed the government's latest move to attract foreign capital and the central bank’s status quo on repo rate.
Sensex, which opened 269 points higher at 74,629 points, moderated to around 74,375 points. This was just 15 points higher than the previous close of 74,360 points.
Nifty, which opened 62 points higher at 23,478 points, also traded at around 23,405 points. This was 11 points lower than the previous close of 23,416 points.
The Nifty Midcap 100 and Nifty Smallcap 100 indices outperformed the broader market, rising 0.5 percent each.
Sectorally, media, PSU banks and realty stocks gained between 1 percent and 3 percent, providing support to the market.
Among Nifty constituents, Bajaj Finance, HDFC Life, Shriram Finance, SBI Life Insurance and Adani Enterprises were the top gainers. On the downside, Wipro, Trent, Tata Steel, Hindalco and Coal India emerged as the major losers.
Investor sentiment received a boost after the Centre issued the Income-tax (Amendment) Ordinance, 2026, exempting foreign investors from paying tax on interest income earned from government securities as well as capital gains arising from their sale, exchange or transfer.
The ordinance, promulgated by President Droupadi Murmu, takes effect from April 1, 2026, making the tax benefit applicable retrospectively from the start of the current financial year.
The amendment to Schedule IV of the Income-tax Act, 2025, introduces a new category of exempt income linked to investments in government bonds by Foreign Institutional Investors (FIIs), subject to prescribed disclosure requirements.
The government said the ordinance was issued as Parliament is not in session and immediate action was required.
Market participants believe the move could help attract overseas capital flows into Indian debt markets at a time of heightened global uncertainty.
