Sensex, Nifty extend gains on unwinding of short positions

BSE Sensex and Nifty extend gains, up 1.5 percent each. Unwinding of short positions in index futures helps.

NSE index December futures' outstanding positions down by 354,400 shares - NSE data.

Foreign investors had sold index futures worth 10.51 billion rupees ($166.24 mln) in last two sessions - NSE and NSDL data.

Both indexes head towards snapping their five-day losing streak and recording their biggest daily gain since October.

Optimism prevails after cabinet clears nationwide sales tax bill, rally in Asian shares.

($1 = 63.2200 rupees)

(Reporting by Abhishek Vishnoi)