These 5 factors drove Sensex 900 pts higher in two consecutive sessions

The buying was seen across sectors and broader markets traded in line with benchmarks for the second straight day, largely driven by domestic factors.

After a steep fall followed by consolidation in the early part of the week, the market has broken on the upside with full force in later part, as bulls took complete charge of Dalal Street for the second consecutive day on August 9.

Buying has been seen across sectors and broader markets traded in line with benchmarks for the second straight day, largely driven by domestic factors.

The BSE Sensex rallied 254.55 points to 37,581.91, taking two-day gains to nearly 900 points. The Nifty50 climbed 77.20 points to close at 11,109.70.

The market breadth was also in favour of bulls as about two shares advanced for every share falling on the BSE. The Nifty Midcap and Smallcap indices gained 1 percent each.

The five factors driving the market high Optimism on FPI surcharge

Reports that the government could tweak or rollback the surcharge on super-rich has played a big part in the upswing. The controversial tax was one of the main reasons for the outflow of foreign institutional investor (FII) money since July.

Presenting the budget on July 5, Finance Minister Nirmala Sitharaman proposed an increased surcharge of 25 percent for individuals earning between Rs 2 crore to Rs 5 crore annual, and 37 percent for those with an income of for more than Rs 5 crore. It effectively increased the tax rate to 39 percent for those in the Rs 2 crore-5 crore bracket and 42.7 percent for those in the higher bracket.

Given that the Income Tax Act includes the association of persons/ body of the individual, trusts in the definition of an individual, the increased surcharge will also be applicable to a majority of the foreign portfolio investors (FPI).

Since July, FIIs have sold more than Rs 25,000-crore worth of shares in India.

"Market gets a breather due to the expectation that the government is likely to be lenient on a higher surcharge on FPIs, which influenced bears to cover their short positions," Vinod Nair, Head of Research at Geojit Financial Services, said.

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