Lessened chances of a US rate hike coupled with a strengthening rupee cheered investors in the Indian equity markets on Monday and sent a barometer index zooming over 576 points during the late-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, an upward trajectory was also witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It rose by 171 points or 2.15 percent at 8,121.45 points.
The S&P BSE Sensex which opened at 26,379.42 points, was trading at 26,796.60 points (3.00 p.m.) -- 575.65 points or 2.20 percent up from the previous day's close at 26,220.95 points.
The Sensex touched a high of 26,802.97 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.
Besides the US, Asian markets too played a predominant factor in influencing the markets here.
Expectations of a Japanese monetary and fiscal stimulus and up-tick in Chinese consumer sentiment stabilised the East Asian markets.
Japan's Nikkei index was higher by 1.58 percent. The Chinese markets -- Hong Kong's Hang Seng index and Shanghai Composite Index -- will remain closed till October 7, Wednesday, on account of the Chinese National Day.
The rupee continued to gain strength on Monday. It gained 26 paise to 65.25 against a US dollar around 2.30 p.m. from its previous close of 65.51 against a greenback. It touched a day's low of 65.14 against a US dollar.
"Broader markets have outperformed the headline index, with major gains coming from banks, metals and autos, suggesting a broad based participation," Nitasha Shankar, vice president, research with YES Securities, told IANS.
Sector-wise, all 12 components of the BSE were trading higher. Banks, capital goods, automobile, consumer durables and metal stocks witnessed healthy buying.
The S&P BSE banking index zoomed by 536.91 points, capital goods index augmented by 492.47 points, automobile index gained by 371.17 points, consumer durables index rose by 213.38 points and metal index was higher by 174.83 points.