The S&P BSE Sensex and NSE Nifty 50 Indexes extended gains in afternoon deals led by buying interest in bluechip stocks like Reliance Industries, HDFC Bank, HDFC, Tata Consultancy Services, Infosys and ICICI Bank. The Sensex surged as much as 365 points to intraday high of 39,867.49 and the NSE Nifty 50 Index moved above its important psychological level of 11,950. The buying interest was seen in the large cap shares as the mid- and small-cap indexes on the BSE were trading marginally higher.

As of 1:23 pm, the Sensex traded 0.88 per cent or 349 points at 39,850 and the NSE Nifty 50 Index climbed 0.8 per cent or 94 points to 11,955.

Fifteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom Index's 1.55 per cent gain. Energy, IT, Bankex, Utilities, Power and Finance sector gauges also advanced 0.8 and 1.15 per cent each.

On the other hand, S&P BSE Auto Index was top loser, down 0.5 per cent.

The mid- and small-cap shares were underperforming their larger peers as the S&P BSE MidCap Index rose 0.3 per cent and the S&P BSE SmallCap Index advanced 0.2 per cent.

NTPC was top gainer in the Nifty 50 basket of shares, the stock rose 3.2 per cent to Rs 135. Bharti Airtel, TCS, Yes Bank, Bharat Petroleum, Reliance Industries, HDFC and UPL were also among the gainers.

On the flipside, Sun Pharma, Mahindra & Mahindra, Eicher Motors, Zee Entertainment, Tata Motors and ONGC were among the losers.