Stocks rose to the highest in a month, led by HDFC, ICICI Bank and other lenders, after the government forecast that the economy will grow at 7.1 per cent. Also, the RBI governor, D Subbarao indicated yesterday that there is further room to cut interest rates.
Besides the financial stocks, Jaiprakash Associated, Tata Steel, Reliance Infra and ONGC were all up 6 per cent.
The Bombay Stock Exchange Sensitive Index or Sensex opened up 58 points on the back of positive global cues. It closed 283.03 points up 9,583.89 points, highest since January 7. The Nifty closed at 2919.90, up by 76.80 points.
On Friday, the US markets closed in green with both the Dow Jones and S&P 500 up by 2.7 per cent and 2.69 per cent, respectively. Even the Nasdaq Composite up by 2.94 per cent.
The other Asian indices were mostly in red today with Nikkei 225 and Strait Times down by 1.33 per cent and 1.92 per cent respectively while the Hang Seng was flat.
The market breadth was positive with over 50 per cent of stocks in green. Out of 2,555 stocks traded, 1,562 advanced and 910 declined.
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Amitabh Chakraborty, head (equities), Religare Securities said that the foreign institutional investors were short covering today in the metal, consumer durables and capital goods sectors.
All the sectoral indices were in the green with the metal sector up by 4.41 per cent, consumer durables 3.69 per cent, capital goods 3.59 per cent, oil & gas 3.37 per cent, and bankex by 3.19 per cent.
Financial stocks performed exceedingly well. HDFC was up 5.55 per cent, ICICI bank 5.17 per cent, SBI 2.6 per cent and HDFC Bank 2.3 per cent.
FIIs were net buyers of Rs 285.39 crore and Domestic Institutional Investors (DIIs) were net sellers of Rs 45.98 crore.