Indian stock markets continued their upward momentum on Tuesday, November 3, 2026, as benchmark indices Sensex and Nifty extended gains for a second consecutive trading session. Investor sentiment improved following Finance Minister Nirmala Sitharaman’s remarks that the government would consider concerns raised by investors over equity taxation. Strong corporate earnings, lower crude oil prices and signs of foreign investors returning to Indian equities also supported the rally.
In early trading, the BSE Sensex climbed nearly 700 points, while the NSE Nifty 50 moved above the 23,600 level. The positive opening followed a strong performance in the previous session, when both benchmark indices recorded significant gains.
Sensex and Nifty extend gains
At around 9:28 a.m. on November 3, the Sensex was trading at 76,400.68, up 707.90 points or 0.94 per cent. The Nifty 50 gained 180.80 points or 0.77 per cent to reach 23,621.60.
The rally followed Monday’s strong market performance. On November 2, the Sensex had surged 1,233.25 points, or 1.66 per cent, to close at 75,692.78. The Nifty advanced 387.70 points, or 1.68 per cent, ending the session at 23,440.80.
The gains reflected improving investor confidence, with buying interest visible across several major sectors.
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Sitharaman's comments on equity taxation
One of the key developments influencing investor sentiment was Finance Minister Nirmala Sitharaman’s statement on equity market taxation.
Speaking at the Financial Express Leadership Awards in Mumbai on November 2, Sitharaman acknowledged that retail investors and participants in the equity market had raised concerns about the existing taxation structure.
She said the government recognised that circumstances had changed and that concerns had become louder, particularly amid foreign portfolio investor outflows. She indicated that the government would consider the feedback.
The Finance Minister also highlighted the importance of equity capital in supporting India's economic growth. According to her, the country needs adequate capital, particularly equity investment, to sustain growth of more than 7 per cent.
However, Sitharaman did not announce any immediate tax reduction or promise changes to the existing rules. She also cautioned against creating an impression that any proposed relief would favour foreign investors over domestic market participants.
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Long-term capital gains tax debate gains attention
Investor concerns have increasingly focused on the long-term capital gains (LTCG) tax applicable to equity investments.
Currently, long-term capital gains from listed equity shares and equity-oriented mutual funds held for more than 12 months are generally taxed at 12.5 per cent on gains exceeding the applicable annual exemption threshold. Short-term gains on qualifying equity transactions are generally taxed at 20 per cent, subject to applicable conditions.
The Securities and Exchange Board of India (SEBI) has reportedly recommended changes to the equity taxation framework, including relief for certain foreign portfolio investors and mutual fund investors.
These recommendations are not final government decisions. Any changes to the tax structure would require approval from the government and could be considered as part of the Union Budget process.
Lower crude oil prices support the market
The easing of international crude oil prices was another factor supporting Indian equities.
Brent crude was trading near $105 per barrel on November 3 after declining approximately 7 per cent in the previous session. Hopes of progress in diplomatic efforts related to the US-Israeli conflict with Iran contributed to the decline.
India imports a significant share of its crude oil requirements. Therefore, lower oil prices can help reduce pressure on the country's import bill, inflation and operating costs for businesses.
A sustained decline in crude prices could be positive for sectors that are sensitive to fuel and transportation expenses. However, geopolitical developments continue to remain an important risk for global markets.
Foreign investors return to Indian equities
Foreign portfolio investor activity also provided support to the market. Provisional exchange data showed that foreign portfolio investors were net buyers of Indian shares worth approximately Rs.31,150 crore on Monday, November 2.
This development was significant because foreign investors had been selling Indian equities amid concerns over valuations, taxation and global investment opportunities.
The return of overseas buying, even for a short period, helped improve sentiment towards large-cap stocks and benchmark indices. Market experts are watching whether this trend continues in the coming trading sessions.
Corporate earnings remain a key driver
Strong quarterly earnings from major companies also contributed to the market's positive momentum.
Reliance Industries was among the major contributors to Monday's rally, with its shares rising nearly 12 per cent following strong quarterly results. Other stocks, including Marico, KRBL and Trident, also recorded gains during the recent trading sessions.
On November 3, Marico gained around 4.5 per cent in early trading after reporting better-than-expected quarterly profit. Several other companies also attracted buying interest following their earnings announcements.
What investors should watch next
The market's performance in the coming sessions is likely to depend on several factors, including corporate earnings, foreign investor flows, crude oil prices and developments in equity taxation.
Although the Finance Minister's remarks have raised expectations among investors, there is no confirmed announcement of an immediate tax concession. Market participants will therefore continue to monitor government policy signals ahead of the next Union Budget.
The combination of improving earnings, lower oil prices and renewed buying interest has provided short-term support to Indian equities. However, geopolitical uncertainty and fluctuations in global markets remain important risks.
