A day after the US Fed decided to maintain interest rates to near zero for a "considerable time" even after its bond-buying programme ends, a benchmark index of Indian equities markets provisionally closed Thursday 480.92 points or 1.81 percent up.
The markets made gains for the second day after two consecutive sessions of decline. The index had lost around 324 points Tuesday and fell by more than 250 points Monday. The index had gained by 138 points or 0.52 percent on Wednesday.
All the sectoral indices made healthy gains. The rally was led by automobile, capital goods, banking, consumer durables, healthcare, oil and gas and metal stocks.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,573.89 points, closed trade at 27,112.21 points, up 480.92 points or 1.81 percent from the previous day's close at 26,631.29 points.
The Sensex touched a high of 27,132.20 points and a low of 26,503.08 points in intra-trade.
"There is a relief in the market after the outcome of the two-day US Fed meeting, which did not result in any major announcements regarding downsizing of the stimulus plan," said Dipen Shah, head - private client group research, Kotak Securities.
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ZyFin Research's chief economist Debopam Chaudhuri said that with the US rate rise possibilities becomes a more distant reality, emerging economies including India can expect see a steady flow 'hot monies' for some more time.
"This is critical for India under current circumstances when the domestic economy is undergoing a healing process. Some additional support in the form of global liquidity would augment this recovery process," said Chaudhuri.
"We are confident in 6-8 months the Indian economic fundamentals would be strong enough to withstand any major outflow of FII money in the wake of rising short term rates in the US."
The S&P BSE automobile index rocketed 474.62 points, followed by capital goods index which soared 424.92 points, bankex gained 358.20 points, consumer durables index moved up by 293.90 points and healthcare index rose by 240.98 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) too made healthy gains. It rose 139.25 points or 1.75 percent at 8,114.75 points.
Major BSE gainers were Unitech, up 12.85 percent at Rs.25.90; HDIL, up 9.24 percent at Rs.93.40; India Hotels, up 9.13 percent at Rs.101.60; Adani Power, up 7.62 percent at Rs.52.95; and Ashok Leyland, up 5.80 percent at Rs.41.05.
Major Sensex gainers included Hero MotoCorp, up 5.57 percent at Rs.2,998.15; HDFC, up 3.73 percent at Rs.1,055.65; Tata Motors, up 3.70 percent at Rs.525.60; Larsen and Toubro (L&T), up at 3.57 percent at Rs.1,574.90; and BHEL, up 3.51 percent at Rs.228.45.
However, Infosys, down 1.08 percent at Rs.3,699.90, and Hindustan Unilever, down 0.58 percent at Rs.750.50, lost ground.
In Asian markets, Nikkei gained 1.13 percent and China's Shanghai Composite gained 0.35 percent. However, Hong Kong's Hang Seng closed 0.85 percent lower.
In Europe, London's FTSE 100 increased by 0.44 percent, Germany's DAX Index was up 0.96 percent, and France's CAC 40 was higher by 0.62 percent.