The Sensex and the Nifty saw sharp gains in trade on a smart victory by the BJP in the state elections and a deregulation in the prices of diesel.The Sensex jumped 321 points, while the Nifty gained 99 points in trade.

Oil and Gas stocks jumped following the deregulation in diesel with ONGC jumping a huge 6 per cent in trade. Oil marketing companies joined the rally with BPCL and HPCL among the winners.

The IT pack, however, ended the day with losses with Infosys, TCS and Wipro among the losers. TCS has now lost almost 10 per cent in two trading sessions.

Hindalco and HDFC were the other stocks that saw a sharp rally in their share prices.

Meanwhile, markets in Europe were trading lower led by losses in the German DAX and the UK's FTSE.

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