The market was hovering near the day's high in early afternoon trade. At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 400.80 points or 1.17% at 34,700.27. The Nifty 50 index was up 139.95 points or 1.36% at 10,441.
Gains were supported by value buying after recent steep fall in share prices. The central bank's decision to inject liquidity into the system through purchase of government bonds also improved sentiment.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1875 shares rose and 533 shares fell. A total of 106 shares were unchanged.
Shares of aviation companies rose after media reports suggested that the government has sought for Election Commission's nod for cutting excise duty on jet fuel. Current rate of excise duty on ATF is 14%. In 2014, excise duty on ATF Was increased from 8% to 14%. Jet Airways India (up 7.92%), Spicejet (up 5.21%) and Interglobe Aviation (up 3.65%), edged higher.
Auto stocks rose. TVS Motor Company (up 7.81%), Eicher Motors (up 4.50%), Escorts (up 4.22%), Maruti Suzuki India (up 4.08%), Ashok Leyland (up 2.76%), Bajaj Auto (up 2.36%), Hero MotoCorp (up 2.13%) and Tata Motors (up 1.76%), edged higher. Mahindra & Mahindra was down 0.33%.
On the macro front, based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the Reserve Bank of India (RBI) has decided to conduct purchase of the following Government securities under Open Market Operations for an aggregate amount of Rs 12000 crore on 11 October 2018 through multi-security auction using the multiple price method.
Overseas, Asian shares were mixed on Wednesday after a mixed finish on Wall Street overnight. US stocks closed mostly lower Tuesday after a volatile session as investors continued to fret over the implication of higher bond yields on equities. The Nasdaq, however, snapped a three-day losing streak in line with a rebound in technology shares.
US President Donald Trump said Tuesday that he did not like the Federal Reserve's decision to continue hiking interest rates. The US central bank last raised its benchmark interest rate by a quarter point in September, while raising its expectations for economic growth for this year and next.
On the US data front, the National Federation of Independent Business small-business optimism index fell 0.9 point in September, falling from a 45-year high to a seasonally adjusted level of 108.8.
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