Lessened chances of a US rate hike coupled with a strengthening rupee cheered investors in the Indian equity markets on Monday and led a barometer index to gain over 444 points during the mid-afternoon trade session.
Other factors that pushed equity prices higher included stable Asian markets, continuation of the positive bias imbibed by last week's monetary easing, and optimism surrounding a healthy earnings seasons due to lower commodities.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange previously closed with gains of 66.12 points or 0.25 percent on Thursday. The Indian markets were closed on Friday, October 2 on the account of Gandhi Jayanti.
On Monday, a similar upward trajectory was witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It rose by 128.35 points or 1.61 percent at 8,079.25 points.
The S&P BSE Sensex which opened at 26,379.42 points, was trading at 26,665.37 points (1.30 p.m.) -- 444.42 points or 1.69 percent up from the previous day's close at 26,220.95 points.
The Sensex touched a high of 26,668.26 points and a low of 26,375.31 points in the intra-day trade so far.
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Market observers cited that lessened chances of a US rate hike in October due to a slowdown in the US jobs market had relieved investors and increased their risk taking appetite.
"The lessened chances of a US rate hike, and the continuation of the positive momentum from the Reserve Bank of India's (RBI) monetary easing has led the prices higher and increased the risk appetite of the investors," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
Last month, the US economy added just 142,000 jobs from 173,000 jobs created in August. The August figurers are being revised downwards.
The jobs data is expected to deter the US Fed from raising rates. These were last raised rates in 2006.
The US Fed will decide whether to raise interest rates during its Federal Open Market Committee meet scheduled for October 27-28.
With higher interest rates in the US, the Foreign Portfolio Investors are expected to be led away from emerging markets such as India.