RIL's shares climb over 2%, ONGC jumps 4% after windfall tax cut

Shares of firms related to oil exploration and refineries were in heavy demand on Wednesday, with Reliance Industries and ONGC rallying after the government slashed windfall tax on petrol, diesel, jet fuel and crude oil.

Reliance Industries shares ended 2.47 per cent higher at Rs 2,501.40 apiece on the BSE. During the day, it jumped 4.25 per cent to Rs 2,545.05.

The market valuation of Reliance Industries advanced by Rs 40,516.96 crore to Rs 16,92,230.96 crore.

Shares of Oil and Natural Gas Corporation (ONGC) climbed 4 per cent to settle at Rs 132.55 apiece. During the day, it rallied 7 per cent to Rs 136.40.

Vedanta shares went higher by 6.22 per cent to Rs 253.45.

Among others, Chennai Petroleum Corporation jumped 7.35 per cent, Oil India climbed 5.84 per cent and Mangalore Refinery and Petrochemicals advanced 4.95 per cent.

"The relief announced by the government for the petroleum sector through reduction in windfall tax and cuts in duties on exports will be a major boost for the sector, particularly for RIL," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

In the equity market, the 30-share BSE Sensex rallied 629.91 points or 1.15 per cent to settle at 55,397.53.

On Wednesday, the government scrapped a windfall tax on export of petrol and cut the levy on overseas shipments of diesel and ATF as well as on domestically produced crude oil following a decline in global oil prices.

"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," said Rohit Khatri, AVP-Fundamental Research, Religare Broking Ltd.