Windfall tax cut cheers Dalal St

Mumbai: Benchmark BSE Sensex rallied over one per cent, while NSE Nifty closed above the 16,500 mark on Wednesday after sharp gains in IT, oil & gas and metal shares amid positive global market trends.

The 30-share BSE Sensex rallied 629.91 points or 1.15 per cent to settle at 55,397.53 as 22 of its stocks ended with gains. During the day, it jumped 862.64 points or 1.57 per cent to a high of 55,630.26. The broader NSE Nifty climbed 180.30 points or 1.10 per cent to 16,520.85 with 34 of its constituents ending in the green.

Buying in index majors Reliance Industries, Infosys and Tata Consultancy Services and FII inflows bolstered the sentiment. Reliance Industries rallied 2.47 per cent and ONGC spurted 4 per cent as the government slashed windfall tax on petrol, diesel, jet fuel and crude oil. The government on Wednesday cur the windfall tax on petrol, diesel, jet fuel and crude oil following a decline in international rates.

"The move is definitely positive for companies like RIL, ONGC and Oil India as the decline in windfall tax would mean better and more sustainable margins. These companies were clear beneficiaries of high oil prices, but the recent correction in oil prices coupled with one of the highest windfall taxes globally could have dented profitability," Rohit Khatri, AVP-Fundamental Research, Religare Broking Ltd.