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The benchmark index, Sensex registered a marginal gain of 0.48%. However, the difference between the day's high and low was 678.3 points.
Heavy selling pressure was observed in fast moving consumer goods (FMCG), capital goods, consumer durables, metal and power indices of the BSE.
Finance Minister Arun Jaitley raised excise duty on cigarettes by 25 per cent for cigarettes of length not exceeding 65 mm.
Traders cited speculation that government may increase allocations towards renewable energy and reduce taxes in the 2015-16 Budget as the reason for the surge.