Tracking overnight gains in US stocks and early Asian cues, the BSE benchmark index was off to a rollicking start today. The Sensex opened 229 points higher and thereafter built on gains with ICICI Bank, RIL, Infosys and L&T leading the rise. Smart gains in Tata Steel that rose 5.7 per cent, Tata Motors (4.4 pc), Hindalco (3.4 pc) and Sterlite (2.8 pc) supported markets.
Sensex finally ended at two-week high levels of 17,683.73, up 337.46 points, or 1.95 per cent. This is the best single day performance since June 29 when Sensex rose by 439 points.
Overall, nearly 1,800 stocks rose and investor wealth surged by Rs 84,000 crore.
Brokers said trading sentiment was bolstered as ECB's new bond buying plan will likely lower borrowing costs for the region's debt-ridden nations and ease fears over euro's fate.
Capital goods stocks were among the best performers on the back of foreign funds flow while realty and metal stocks were also among the biggest gainers.
Most banking stocks, including ICICI Bank up 4.68 per cent and SBI which gained 2 per cent, also rose on expectations of a rate cut in RBI's policy meet on September 17, said dealers.
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"This (ECB's plan) means that, the prospect of defaults by sovereigns has reduced in EU. That supported markets," said Dipen Shah, Head of PCG - Research, Kotak Securities.
The sentiment got a further boost by better-than-expected US private-sector jobs data for August, 2012 and China's statement of a schedule of new infrastructure projects.
Asian indices, including Japan, China and Korea, closed up between 1-4 per cent. Europe was up 1 per cent in afternoon.
"FII inflows can only lift Indian markets up to a point. What they badly need is the fuel of reforms, which has been in short supply during the UPA regime," said Amar Ambani, Head of Research, IIFL. (MORE)