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Indian shares rise as govt cuts windfall tax on crude sales, fuel exports

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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.

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“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.

“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 favor 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.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)

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