Positive global markets along with value buying and hopes of an ease in the monitory policy with the appointment of Shaktikanta Das as the RBI chief pushed the key equity indices 1.8 per cent higher on Wednesday.
Analysts said investors were optimistic over the swift appointment of Das as
the 25th Governor of the Reserve Bank as it might lead to a more liberal monetary policy.
However, caution ahead of the release of industrial production and retail inflation data coupled with higher crude oil prices and outflow of foreign funds arrested the upward movement.
All sectoral indices rose, led by financial and auto counters, with the latter gaining 3 per cent the highest increase on BSE.
"A clear mandate in key states assuaged investor concerns and had a positive impact on volatility," said Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund.
According to Vinod Nair, Head of Research, Geojit Financial Services: "Market rallied and reclaimed the 10,700 mark as swift reaction from government with the appointment of new RBI governor supported the sentiment.
"Bank Nifty outperformed with an expectation of ease in liquidity and relaxation in PCA framework. Global indices rallied on US-China trade hopes and the ripple effect was seen in other EMs as well."
Index-wise, the S&P BSE Sensex settled higher by 1.79 per cent, or 629.06 points, at 35,779.07 points, from its previous close of 35,150.01 points. It touched an intra-day high of 35,826.58 points and a low of 35,167.47 points.
The NSE Nifty50 advanced 188.45 points or 1.79 per cent to close the session at 10,737.60 points.
The BSE market breadth was positive as the number of advancing stocks was thrice the declining ones. A total of 1,910 stocks advanced while 652 declined.
In the broader market, BSE Mid-cap and Small-cap registered strong gains, advancing 2.53 per cent and 2.46 per cent respectively.
On the currency front, the rupee settled at 72.01 per US dollar, weakened by 85 paise from the Tuesday's close of 71.86.
"Technically, with the Nifty rallying sharply higher after the bounce back seen in the previous session, the bulls are gaining control. Further upsides are likely once the immediate resistances of 10,747 are taken out," said HDFC Securities' Retail Research Head Deepak Jasani.
"Crucial supports to watch for any weakness are at 10,640-10,567."
In terms of investment, provisional data from the BSE showed that foreign Institutional Investors (FII's) sold stocks worth Rs 1,299.43 crore, whereas the Domestic Institutional Investors (DII's) bought Rs 1,121.29 crore of shares.
All the 30 stocks on Sensex advanced led by Hero MotoCorp, which gained 7.57 per cent at Rs 3,265.30, while Yes Bank, Bharti Airtel, Adani Ports and Tata Motors (DVR) advanced in a range of 4 to 5.30 per cent.
--IANS
ravi-rv/mr
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