Mumbai: Bolstered by the partial roll-back of transaction tax, the market witnessed a sharp rally in the last fifteen minutes of trading today (July 21, 2004), lifting the Sensex by 36 points on hectic buying support from operators and retail investors.

In a quick response to the Government's decision to lower the proposed transaction tax on day-traders and arbitrageurs from 0.15 per cent to 0.015 per cent, investors made hectic deals after the news landed at the fag end of the session.

The BSE Benchmark 30-share Index, which was trapped in a small range of about 40 points in the major part of session, suddenly turned volatile rising to the intra-day high of 5041.19 before ending at 4993.76 as against yesterday's (July 20, 2004) close of 4957.88, a net rise of 35.88 points or 0.72 per cent.

The Government has also exempted bonds from the new tax and replaced the 0.15 per cent fixed tax on all securities by differential rates and is levied on delivery to be shared by buyers and sellers.

Brokers said day-traders and arbitrageurs were engaged in making fairly good commitments right from the beginning of the session on strong optimism about the tax reduction.

Foreign Institutional Investors (FIIs) were believed to be net buyers in blue chip counters during the day.

The Government's decision is welcomed by the broking fraternity and is expected to have a positive impact on the market when it opens for trading tomorrow (July 22, 2004). Key counters like RIL, Tisco, SBI, HDFC, MTNL, MUL, ONGC, Satyam Computer, HPCL and Tata Power recorded marked gains. However Grasim, GACL, Infosys Tech, ITC and Hindalco closed with moderate losses.