Mumbai: Indian markets Thursday logged their best daily gain since May 12 with Sensex jumping 481 points to 27,112.21 and Nifty soaring over 139 points to 8,114.75 bolstered by Fed's continued pledge to retain rates at low levels and rising optimism over trade ties with China.
Fuelled by foreign funds buying, all the 12 sectoral indices closed with gains between 0.58 percent and 4.65 percent. Realty, consumer durable, capital goods, auto, power and banking were the pacesetters in the surge.
The benchmark S&P BSE 30-share Sensex resumed lower and touched a low of 26,503.08. It, however, quickly rebounded in line with positive Asian trends to cross 27K-mark and hit high of 27,132.20, before settling at 1-1/2-week high of 27,112.21 -- a rise of 480.92 points or 1.81 percent. Previously, it had zoomed 556.77 points or 2.42 percent on May 12.
Similarly, the 50-share NSE Nifty regained 8,100 level and touched the day's high of 8,120.85 before settling 139.25 points higher at 8,114.75. Previously, it had zoomed 155.45 points on May 12.
In a statement, the US Federal Reserve Chairwoman Janet Yellen yesterday in its policy setting meeting promised to keep the interest rates near zero for a "considerable time after its bonds buying programme comes to an end in October, giving immediate relief to the emerging markets, including India as fears of immediate capital outflows have subsided.
Meanwhile, India today signed a 5-year trade and economic cooperation agreement with China with a view to improve the trade balance and obtain USD 20 billion Chinese investments.
"With US rate rise possibilities becoming a more distant reality, emerging economies including India can expect to keep their hot monies 'hot' for some more time," said Debopam Chaudhuri, Chief Economist, ZyFin Research.
Major Sensex gainers were Hero Motocorp (5.67 percent), HDFC (3.73 percent), Tata Motors (3.70 percent), L&T (3.57 percent), BHEL (3.51 percent) and Bajaj Auto (3.47 percent).
Participants were truly excited by the prospects of huge investments by China in India's infrastructure, railway & manufacturing projects, according to Devang Mehta, Sr. VP & Head - Equity Advisory, Anand Rathi Financial Services.
Asian stocks gained in choppy trade after the US Federal Reserve after a two-day policy meet renewed a pledge to keep interest rates near zero for a considerable time and announced a further USD 10 billion reduction in monthly bond purchases.
Key benchmark indices in China, Singapore, Taiwan and Japan rose by 0.02 percent to 1.13 percent, while indices in Hong Kong and South Korea fell 0.72 percent to 0.85 percent.
Europe was also trading higher as indices in France, Germany and the UK moved up by 0.34 percent to 0.60 percent.
Jignesh Chaudhary, Head Of Research, Veracity Broking Services said: "Indian equities continued to trade strong for the second day with the help of bluechips as global equities traded strong after the Fed stated that rate hikes would not happen for a considerable time."
In the 30-share Sensex pack, 28 scrips ended higher while only two finished lower.
Major gainers include Dr Reddy's Lab (3.34 percent), Tata Power (2.86 percent), Maruti Suzuki (2.48 percent), NTPC (2.43 percent), Wipro (2.40 percent), ICICI Bank (2.37 percent), SBI (2.21 percent), TCS (1.86 percent), Axis Bank (1.73 percent) and Reliance Industries (1.67 percent).
However Infosys dropped 1.08 percent and HUL fell 0.58 percent.
Among the S&P BSE sectoral indices, Realty rose by 4.65 percent, Consumer Durables 3.17 percent, Capital Goods 2.84 percent, Power 2.23 percent, Bankex 1.98 percent, Healthcare 1.76 percent, Oil&Gas 1.61 percent and Metal 1.23 percent.
"After steep recovery, its likely that markets would witness pause on Friday; however, stock specific move will keep the traders busy," said Jayant Manglik, President-retail distribution, Religare Securities.
Total market breadth turned positive as 2,235 stocks closed in the green, 827 finished in the red while 94 ruled steady.
