By Indulal PM
MUMBAI (Reuters) - The BSE Sensex rose 1.5 percent on Thursday, snapping a three-day losing streak, as hopes the U.S. Federal Reserve would not rush into raising interest rates boosted heavyweight banks and blue chips such as Bharat Heavy Electricals Ltd.
Minutes from the Fed's meeting in September, published on Wednesday, appeared to signal that concerns about the dual threats of a stronger dollar and weaker global economy could potentially push back a tightening in U.S. monetary policy.
The stock market gains were the biggest since Sept. 18 and were led by blue-chip stocks hit the most during a three-session sell-off that brought the indexes to their lowest close in two months on Wednesday.
Investors now await the start of April-June earnings, with Infosys Ltd set to kickstart results on Friday.
"Today's rally was basically mirroring the U.S. and regional stocks. Earnings would be the next key trigger. The overall sentiment is positive over the last several months, which pushed valuations," said Daljeet S Kohli, head of research, at IndiaNivesh.
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"We advise clients to have a wait and watch approach and stick to quality stocks," Kohli said.
The benchmark BSE Sensex gained 1.49 percent at 26,637.28, while the broader Nifty closed up 1.5 percent at 7,960.55.
Bharat Heavy Electricals Ltd , which fell 16.11 percent between Sept. 1 and Wednesday, gained 8.4 percent after it won a $1.28 billion contract, which is about 7-8 percent of its total order book.
Banks were among other major gainers. State Bank of India closed 2.8 percent higher while ICICI Bank gained 2.75 percent.
Other infrastructure companies also rose. Larsen and Toubro gained 2.7 percent while GVK Power and Infrastructure Ltd closed up 3.1 percent.
Hindalco Industries , which fell 15.6 percent between Sept. 1 and Wednesday, closed 6.1 percent higher.
Shares in Cummins India closed 4.74 percent higher after Deutsche Bank upgraded the stock to "buy" from "hold" and added it to the top picks in the industrial and manufacturing sector.
However, technology stocks fell ahead of Infosys Ltd's earnings on Friday. Infosys fell 0.1 percent, adding to its 4.7 percent fall in the previous session, while Wipro Ltd closed down 1.1 percent.
(Reporting by Indulal PM; Editing by Anupama Dwivedi)