The Indian equity benchmarks extended gains in noon deals on the back of buying interest in ICICI Bank, Infosys, Hindustan Unilever, Maruti Suzuki, Kotak Mahindra Bank and Larsen & Toubro. The Sensex rose as much as 522 points and Nifty 50 index reclaimed its important psychological level of 16,350. The market sentiment got a boost after the government decided to cut excise on petrol and diesel and also lowered custom duty on iron, steel and plastic products in a move to combat rising inflation, analysts said.
As of 1:15 pm, the Sensex rose 390 points to 54,717 and Nifty 50 index advanced 90 points to 16,355.
Union Finance Minister Nirmala Sitharaman on Saturday announced the reduction of excise duty on petrol and diesel along with other measures to ease the burden of high inflation on people.
Sitharaman announced a reduction of excise duty of Rs 8 per litre on petrol and Rs 6 on diesel, which she said would lower the price of petrol by Rs 9.5 per litre and diesel by Rs 7 per litre. She also urged states to cut their share of fuel revenue too.
Meanwhile, buying was visible across sectors as thirteen of 15 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty Auto index's 2.5 per cent gain. Auto shares witnessed strong buying interest following cut in price of petrol and diesel. Nifty Bank, IT, Financial Services, PSU Bank, Private Bank, Healthcare and Consumer Durable indices also rose between 1-2 per cent.
On the other hand, metal shares came under heavy selling pressure after the government increased duty on exports of iron ore by up to 50 per cent, and a few steel intermediaries to 15 per cent, according to a notification.
Maruti Suzuki was top Nifty gainer, the stock rose 5 per cent to Rs 7,945. Mahindra & Mahindra, Hero MotoCorp, IndusInd Bank, Larsen & Toubro, Asian Paints, Hindustan Unilever, Apollo Hospitals, Bajaj Finance, Titan, ICICI Bank, Kotak Mahindra Bank and Tata Motors also rose between 2-3.7 per cent.
On the flipside, JSW Steel and Tata Steel were among the top Nifty losers, both the shares fell over 12 per cent each. ONGC, Hindalco, ITC, Power Grid, Coal India, Adani Ports and Tata Consumer Products were among the notable losers.
The overall market breadth was positive as 1,741 shares were advancing while 1,578 were declining on the BSE.