BENGALURU: Indian shares rose more than 1% to a six-week high on Wednesday, as oil producers and refiners surged after the government slashed windfall taxes on local crude sales and fuel exports.
The NSE Nifty 50 index gained 1.2% to 16,537, as of 0458 GMT, while the S&P BSE Sensex was up 1.3% at 55,459.14.
Both the indexes hit their highest since June 6. India cut the windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than a month after it imposed the two charges.
“The decision to cut windfall taxes is giving a trading bounce to the companies which were impacted,” said Saurabh Jain, assistant vice-president, research, at SMC Global Securities, adding that the taxes would stay here and the government would review them frequently.
Indian shares close at over 1-month high
“People are afraid of this ad hocism in public sector energy companies. They should use the bounce to square off positions.”
Jain said. Reliance Industries jumped 4.3%, while Vedanta Ltd , Oil and Natural Gas Corp, and Oil India Ltd gained between 4.5% and 7.0%.
The Nifty energy index gained 1.5%, while the beaten-down Nifty IT index surged 1.8%.
The IT index has declined about 28% so far this year as investors dumped growth stocks in favour of value stocks due to the high interest-rate environment.
Shares of Hindustan Unilever gained 1.2% after the consumer giant posted a quarterly profit that beat estimates. Nifty 50 components Wipro and IndusInd Bank will report their June-quarter earnings later in the day.
Meanwhile, the Indian rupee was trading almost flat after hitting a record low of 80.0650 in the previous session.
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