Mumbai: Discounting a host negative factors, the Sensex today (July 22, 2004) opened with a wide upside gap of about 48 points in response to the Government's decision to amend the proposal of transaction tax, adopting differential rates for different classes of securities.

The market, however, remained cautious during morning trading in the light of monsoon worries and weak global advices, brokers said.

The BSE Benchmark 30-share Index opened strong at 5041.14 as against yesterday's (July 21, 2004) close of 4993.76 and later rose to a high of 5058.83 before being quoted at 5022.90 at 10.30 am, up by 29.14 points.

Operators, day-traders and arbitrageurs were seen making fresh commitments following favourable Government's decision on the proposed transaction tax which has been lowered from 0.15 per cent to 0.015 per cent for day traders, arbitrageurs and derivatives traders.

Welcoming the move, brokers said had it not been for erratic monsoon leading to drought-like conditions in some parts of the country and a sharp slide in world markets, shares prices would have rallied smartly on the tax reduction.

The Nasdaq Composite Index and the Dow Jones Industrial Average yesterday ended lower by 42.70 points and 102.94 points respectively. The South East Asian markets were quoted sharply down during morning trading today.

Meanwhile, Foreign Institutional Investors reported net investments of Rs 161 crore on Monday and Tuesday. Heavyweights like RIL, SBI, Tisco, Tata Motors, BHEL, ITC HDFC, Hindalco, MUL and ONGC were quoted up.