Mumbai: Benchmark indices surged in trade Tuesday as investors were buoyed by news reports that the government was looking at an overhaul of taxation structure on equities. The S&P BSE Sensex surged 581.64 points or 1.48% to close at 39,831.84. The Nifty 50 index was up 159.70 points or 1.37% to close at 11,786.85.

Media reports said the Prime Minister's Office, in consultation with the finance ministry and NITI Aayog, was reviewing existing structures of long-term capital gains (LTCG) tax, securities transaction tax (STT) and scrapping of dividend distribution tax (DTT). This comes in the wake of a sharp cut in corporate tax rates last month.

Shares of metal companies gained after a report said the government may allow integrated steel manufacturers to divert portion of iron ore from captive mines for use by their other to joint venture entities. Tata Steel soared 6.6%, Vedanta gained 3% and JSW Steel rose 6.1%. Steel companies also rose as uncertainty around a no-deal Brexit was put to rest after the European Union on Monday agreed to delay Brexit until 31 January, increasing the chances of a UK election before the end of the year.

Shares of Reliance Industries closed 2.30% higher at 1467.10 as the board of directors of RIL approved the formation of a wholly-owned subsidiary for digital platform initiatives and announced an investment of 1,08,000 crore in the arm through optionally convertible preference shares. The subsidiary will also acquire RIL's equity investment of 65,000 crore in Reliance Jio.

Mahindra & Mahindra (M&M) closed 3.36% higher to close at 611.10 as the company said its auto division delivered close to 13,500 vehicles across the country on Dhanteras, substantially higher than last year.

Tata Motors advanced 16.63% to close at 172.55, extending gains for the second day after announcing Q2 numbers. The stock rose 35.92% in two trading sessions. On a consolidated basis, Tata Motors’s loss narrowed to 227.62 crore in the September quarter from a loss of 873.27 crore a year ago.

Yes Bank Ltd closed at 58.20, up 6.30% on the NSE as the private lender is in talks with various investors to raise funds. According to a Mint report, Microsoft Corporation may have initiated a dialogue with the bank to infuse fresh capital. Another news report suggested that industrialists Sunil Mittal and Sunil Munjal were in talks with the bank. The stock fell 67.90% in the last one year compared to a 14.98% gain in Nifty and a 19.69% gain in the Nifty Bank index.

Shares of Adani Enterprises Ltd rose 6.43% to close at 195.20. The stock hit a high of 196.90 as the company said it signed a memorandum of understanding (MoU) with Digital Realty to jointly develop and operate data centers, and data center parks.

Telecom shares were the biggest laggards today due to concerns over financial stress in the firms after the Supreme Court ordered telcos to repay their dues to the government within three months. Bharti Airtel was down 3.41% to close at 359.95, while Vodafone Idea tumbled 8.11% to close at 3.85. Airtel also fell as it deferred the announcement of its September quarter earnings till 14 November, seeking more clarity on the adjusted gross revenue (AGR) issue from the department of telecommunications (DoT) on dues payable. The Supreme Court (SC) had upheld DoT’s definition of AGR, which may lead to Airtel alone paying 21,682 crore in past dues.

The market breadth was positive. On the BSE, 1,439 shares rose and 1,027 shares fell. A total of 211 shares were unchanged. On Nifty, 39 stocks advanced and 11 stocks declined. In the broader market, the BSE Mid-Cap index was up 1.12%. The BSE Small-Cap index was up 0.55%.