In the biggest single day gain since March, the BSE Sensex soared 513 points on Friday to regain the 18k mark after nine days to close at 18,241 on the back of sharp dip in global crude oil prices and firm overseas cues.
Analysts said easing crude oil prices reduced investor concerns of inflationary pressures and hike in interest rates.
India imports 75 per cent of its requirement and soaring oil prices had been a nagging concern. An Empowered Group of Ministers (EGoM) is slated to meet later today to discuss fuel prices, including a possible hike in diesel and cooking gas to bridge the subsidy burden of oil companies.
Besides, analysts said, frantic short-coverings in the recently battered counters ahead of the expiry of derivatives contract next week also boosted the market sentiment.
After having gained about 177 points yesterday, the Bombay Stock Exchange 30-scrip index surged 513.19 points or 2.89 per cent to reach 18,240.68 -- the largest gain after March 1, when the Budget proposals had kicked it up over 600 points. The gauge touched today’s high of 18,268.95.
The NSE 50-issue Nifty also flared 151.25 points or 2.84 per cent to end at over one-week high of 5,471.25.
CNI Research Chairman Kishor Oswal said fall in oil prices have given the government option not to raise fuel prices immediately, and if they dip to about USD 85 a barrel, then there may be cut in energy prices, considerably reducing fears of inflation and high interest rate pressures.
IIFL Head of Research Amar Ambani said, “A strong bout of short-covering, coupled with a world-wide relief rally lifted the spirits in the Indian markets today. All eyes will be on the EGoM on fuel prices, which is scheduled to take place later this evening,”
Oil prices fell after International Energy Agency decided to release 60 million barrels of crude, giving global economy relief from high energy costs. The New York crude oil tumbled nearly 5.0 per cent to about $90 a barrel, while Brent Crude plunged $7 to about $107.
Globally, besides Taiwan, major Asian markets closed with sharp gains. Key indices from China, Hong Kong, Japan, Singapore and South Korea ended up 2.19 to 0.85 per cent.
European stocks too were trading remarkably higher in afternoon deals. The CAC was up 1.9 per cent, the DAX and FTSE by 1.6 per cent each.
Back home, FIIs, after nine sessions of heavy sell-off, turned net buyers to the tune of Rs 229.21 crore yesterday.
Infosys was up 3.17 per cent, ICICI Bank (3.34 pc), L&T (4.25 pc), HDFC (4.46 pc), SBI (5.95 pc), TCS (3.81 pc), ITC (1.88 pc), HDFC Bank (2.11 pc), Tata Steel (3.92 pc), ONGC (3.12 pc), Bharti Airtel (2.45 pc), Hero Honda (6.07 pc), M&M (3.18 pc) and Tata Motors (2.07 pc).
Of the 30 Sensex counters only Reliance Industries and REL Infra recorded minor losses.
Recently hammered realty counters attracted heavy buying on bargain hunting. The BSE-Realty index, which was down by 223.51 points or 10.39 per cent in the last seven sessions, rebounded 72.44 points or 3.76 per cent and was the top gainer from sectoral indices.
Of 13 sectoral indices, only BSE-CD ended 2.24 per cent lower. Other indices settled higher between 3.76 per cent and 1.13 per cent. BSE-Metal index, BSE-IT, BSE-CG, Bankex and Auto were other major gainers.
The market breadth at BSE turned positive as 1,984 stocks closed in the green, while 852 that ended in the red. The total turnover improved to Rs 2,830.49 crore from Rs 2,525.86 crore on Thursday.