The 30-stock Bombay Stock Exchange (BSE) sensitive index (Sensex) today crossed the 3700 mark on increased purchases by investors, cheered by the government's economic survey, which called for lower interest rates amid benign inflation levels. The Sensex gained 99.13 points at 3,712.74.
On the National Stock Exchange (NSE), the S&P CNX Nifty Index spurted by 23.95 points to 1,189.40.
Stocks of state-run companies surged on hopes that the government would push ahead with reforms in the Union Budget.
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MTNL (up 9.94 per cent to Rs 169.30), HPCL (up 9.81 per cent to Rs 283.80) and Bhel (up 5.57 per cent to Rs 182.90) advanced on institutional buying.
Stocks of the Shipping Corp of India (up 7.31 per cent to Rs 65.30) improved on reports that the Malaysia International Shipping Corporation had expressed interest in bidding for the company.
Meanwhile, cements stocks attracted buying interest after the government lowered freight rates for cement in the Railway Budget.
Gujarat Ambuja (up 4.83 per cent to Rs 238.85), ACC (up 2.77 per cent to Rs 166.85) and Larsen & Toubro (up 1.58 per cent to Rs 202.35) remained in the limelight.
Among other counters, SBI (up 7.65 per cent to Rs 260.25) rose on hopes that the government would pave the way for increased foreign holding in the country's largest bank.
Pharma major Dr Reddy's (up 8.84 per cent to Rs 1,107.55) rose on reports that the US Food and Drug Administration (FDA) had accepted its application to market a slightly modified generic form of Pfizer's hypertension drug amlodipine in the US.
Other pharma stocks such as Cipla (down 1.68 per cent to Rs 1,048.40) and Ranbaxy Labs (down 1.44 per cent to Rs 871.50) ended in the red on profit booking at higher levels.
Technology stocks gained ground on signs of an economic recovery in the US and an overnight jump in US markets.
Satyam Computer (up 4.80 per cent to Rs 293.75), HCL Tech (up 2.93 per cent to Rs 268.35) and Infosys Technologies (up 2.59 per cent to Rs 3,844.85) remained firm on fund-based buying.
Frontline stocks such as Digital GlobalSoft (Rs 578.15), Polaris Soft (Rs 189.30) and Wipro (Rs 1,662.85) also moved upwards.