: The BSESensexsurged over 3 percent on Thursday with the benchmark index marking its highest close in nearly three years, led by banks, after the U.S. Federal Reserve surprised the markets by sticking to its stimulus plan.
Analysts say the Fed decision may lead to a resurgence of much needed portfolio flows into emerging markets like India. Foreign institutional investors have already bought more than 75 billion rupees worth of Indian shares over the previous 10 sessions.
In a related development, the rupee zoomed to its highest value in a month, trading at 61.67/68 per dollar compared to its close of 63.38/39 on Wednesday. The unit rose as high as 61.64, its strongest since August 16. Traders said besides expectations of increased capital inflows, the dollar's weakness against other currencies overseas, boosted the rupee's sentiment.