As the government gets its act together to push investment and reforms, the BSE Sensex on Wednesday went up by 434 points, the highest single-day gain in 2012, also in sync with a rally in global stocks amidst expectations of a stimulus by ECB in troubled Eurozone.
Investor wealth grew by a whopping Rs 1.30 lakh crore today to Rs 58.64 lakh crore.
Led by banks, infra and automobile stocks on hopes that the Reserve Bank will further cut interest rates later this month, the benchmark Sensex opened at 16,100.36 with a gain of nearly 80 points.
As the day progressed investors took cues from the Asian markets which were up 1-2 per cent. In the afternoon session, the signals from the European markets were also positive which fuelled the rally on both BSE and NSE. Six out of 10 stocks gained on the domestic bourses today.
Allaying concerns over policy inaction, the government has taken some decisive measures to boost exports and rein in fiscal deficit through austerity measures.
For pushing investment in big-time infrastructure projects, Prime Minister Manmohan Singh has also convened a meeting of senior ministers later today to clear the road-blocks in the multi-billion dollar sector.
The Sensex closed at 16,454.30, up 433.66 points or 2.71 per cent — the best daily gain in percentage terms since January 3. With the return of foreign inflows, rupee further stabilised and was last trading at 55.40-55.50 levels.
The Indian shares extended their three-day winning string since Friday with Sensex gaining close to 500 points in this period.
“Reports indicated that PM is meeting to discuss expediting infra projects that have been delayed... hopes of rate cut by the RBI fuelled rally in bank and auto stocks.
European equities rallied on hopes that policy makers at ECB will unveil fresh monetary stimulus measures,” said Sanjeev Zarbade, VP (PCG), Kotak Securities.
All the 30 Sensex stocks ended higher with gains led by Tata Motors, L&T), Jindal Steel, Hero MotorCorp and Sterlite Industries.
Similarly, the 50-share NSE Nifty shot up by 133.80 points, or 2.75 per cent to 4,997.10, after testing the key 5,000 level.