Mumbai, Jan 15 (TIWN / IANS) Sensex surged over 340 points during the afternoon session of the trade on Tuesday as lower inflation figures gave way to expectations of an ease in the monetary policy by the central bank.

The Reserve Bank of India (RBI) is set to meet in February to decide on the policy rate.

Lower fuel prices eased India's retail inflation in December to 2.19 per cent, a 18-month low, from the annual rate of 2.33 per cent in November, data showed after the markets closed on Monday. 

Except for the telecom counters on BSE, all the other sectors gained, led by IT, energy and oil and gas stocks.

At 1.32 p.m., the Sensex traded at 36,197.35 points, higher by 343.79 points or 0.96 per cent from the previous close of 35,853.56.

It had opened at 35,950.08 points and touched an intra-day high of 36,265.11 and a low of 5,950.08.

The Nifty50 traded at 10,840.35, higher by 102.75 points or 0.96 per cent from the previous close of 10,737.60.

The top gainers on Sensex were Yes Bank, Infosys, Reliance Industries, Tata Consultancy Services and Vedanta.

In contrast, only 6 stocks out of the 30 on Sensex traded lower: Maruti Suzuki, ICICI Bank, Power Grid, NTPC, Bharti Airtel and Tata Motors(DVR).