Mumbai, June 6 (IANS) A benchmark index of Indian equities markets surged almost three percent Wednesday, the biggest gain in almost six months, on hopes of rate cuts by the central bank and reforms in key infrastructure, banking and finance sectors.
Positive cues from global markets, fall in crude oil price and recovery in the value of rupee helped the rally.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened in the positive at 16,100.36 points, ended the day at 16,454.30 points, up 2.71 percent or 433.66 points from its previous close at 16,020.64 points.
This is the biggest single day gain in the benchmark Sensex since Jan 3, 2012.
The wider 50-scrip S&P CNX Nifty of the National Stock Exchange rallied 2.75 percent or 133.80 points at 4,997.10 points. The Nifty soared past the 5,000-point mark intra-day.
The rupee strengthened and ended the day at 55.36 against a dollar, compared to the previous day's close at 55.64.
There was strong buying support in interest rate-sensitive auto, banking, real estate and capital goods stocks on speculation that the Reserve Bank of India will cut key policy rates later this month to revive industrial growth.
Early this week, RBI deputy governor Subir Gokarn hinted at rate cuts, saying that decline in crude oil prices in the international markets and moderating core inflation coupled with slowdown in economic growth would give some room for easing the monetary policy.
The RBI is scheduled to announce first quarter review of the monetary policy on June 18.
The auto index of the BSE surged almost four percent, while capital goods index rallied 3.63 percent and banking index advanced 3.01 percent.
Tata Motors surged 5.71 percent to Rs.234.20. The country's largest lender State Bank of India rallied 3.81 percent at Rs.2,159.45.
Among the prominent Sensex gainers were L&T, up 4.77 percent at Rs.1,267.25; Jindal Steel, up 4.63 percent at Rs.432.05; Hero MotoCorp, up 4.29 percent at Rs.1,945.75; Sterlite Inds, up 4.06 percent at Rs.93.60; and NTPC, up 3.84 percent at Rs.152.60.
Buying support was across the board as all the 30 scrips that form Sensex closed in the positive, with 24 firms gaining over two percent.
The speculation that the government would push forward much awaited reforms in pension, banking, infrastructure and might take some positive decision on allowing foreign direct investment in aviation, banking and retail, have boosted sentiments in the market.
Prime Minister Manmohan Singh is scheduled to meet group of ministers Wednesday evening to give a push to major infrastructure projects.
Rallies in markets across the globe also helped. Among the other Asian markets, the Japanese Nikkei rose 1.81 percent at 8,533.53 points, Hong Kong's Hang Seng rallied 1.43 percent at 18,520.53 points. However, Shanghai Composite index closed 0.06 percent down at 2,557.40 points.
In Europe, Britain's FTSE 100 was ruling 1.42 percent higher at 5,334.92 points and the German DAX was trading 1.67 percent up at 6,069.09 points at the closing bell here.