Markets nearly erase 2016 losses to end at a four-month high

The S&P BSE Sensex reclaimed 26,000-mark and ended up 328 points, or 1.3%, at 26,007 and Nifty50 fell shy of 2016 high by one point

Indian indices on Tuesday posted their biggest single-day advance in two weeks, boosted by earnings of Maruti Suzuki. Gains in the European market and recovery in global crude oil prices also helped investor sentiment.

The Sensex added 328 points, or 1.3 per cent, to end at 26,007, the highest close since January 1. The Nifty 50 index rallied 107.6 points, or 1.4 per cent, to 7,962.6, only one point shy of a new 2016 high.

Read more from our special coverage on "SENSEX"

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• Earnings to steer market in holiday-shortened week: experts

Both indices have rallied 13 per cent each since March 1, helped by recovery in global markets. The indices had plunged over 12 per cent in the first two months of the year, on fears of a China-led global slowdown.    

Foreign investors on Tuesday bought shares worth over Rs 500 crore, provisional data showed.

“European markets traded higher when they opened, which provided support to Indian markets. There are expectations that the US Federal Reserve (US central bank) would put rate hikes on hold and continue with its dovish outlook,” said Dipen Shah, senior vice-president and head of private client group research, Kotak Securities.

Crude oil prices recovered their early losses and rose one per cent, with Brent crude oil heading to $45 per barrel.

Global investors were seen taking a cautious stance ahead of the policy review meetings of the US Federal Reserve and Bank of Japan. Back home, the second part of the Budget session of Parliament has had a stormy start. However, investors would keenly await the fate of key legislations such as the GST (Goods and Services Tax) Bill and the Bankruptcy Code, also known as Insolvency and Bankruptcy Bill 2015. Metal, banking, and automobile stocks led the rally on Tuesday. Maruti Suzuki was the biggest gainer among Sensex stocks, gaining 3.6 per cent, after its March quarter sales surpassed expectations. Tata Steel jumped three per cent amid a rally in global metal companies, while Axis Bank ended two per cent higher ahead of its results.

The BSE Mid Cap and Small Cap indices gained 0.8 and 0.7 per cent respectively, underperforming the Sensex.