MUMBAI (Reuters) - The BSE Sensex surged over 3 percent on Thursday, marking its highest close in nearly 3 years, led by banks after the U.S. Federal Reserve surprised the markets by sticking to its stimulus plans.
The NSE bank index jumped 6.7 percent on hopes that after Fed's move the Reserve Bank of India will have greater flexibility if it wants to roll back some of the cash tightening steps it initiated since mid-July in its monetary policy review on Friday.
Among the bank shares, Yes Bank Ltd jumped 22.43 percent while ICICI Bank Ltd surged 6.49 percent.
The BSE Sensex rose 3.4 percent to mark its highest close since Nov 2010 while the broader Nifty ended 3.7 percent higher, marking it highest close since May 2013.
(Reporting by Abhishek Vishnoi; Editing by Gopakumar Warrier)