Markets witnessed a resounding rally following heavy buying in frontliners tracking buoyant overseas cues with the benchmark Nifty surging by 70 points to end just shy of crucial 7,900 mark even as the impending Fed rate hike decision remained in spotlight.
A sharp overnight rally in Wall Street - its highest level in two-weeks on the back of robust US ratail sales data predominantly helped spur the positive mood across Asian and European equity markets ahead of the most anticipated macro event for many years.
Investors are highly optimistic that the apex bank would slash key rates for the fourth time this year at its upcoming policy review on easing inflationary pressure.
Sentiment also got some support with the government's decision to allow partly paid shares and warrants as eligible capital instruments for the purposes of FDI policy, bringing greater flexibility in their use to raise capital.
At a two-day policy meeting starting Wednesday, Fed officials will put to rest all speculation on whether to raise interest rates for the first time in nearly a decade, or wait until next year, reflecting the global turmoil and slowdown in China.
After a strong start to trade, the key indices kept moving higher throughout the session lergely supported by global cues, even briefly reclaiming key 7,900-mark.
Though the surge caught many by surprise, it suggests that aggressive pre-positioning from retail investors and traders,who are increasingly betting that the Federal Reserve will not raise interest rates this year, a floor trader commented.
The 50-share index opened with a gap-up at 7,886.85 and rallied further to a fresh intra-day high of 7,913.90 before concluding at 7,899.15, showing a healthy rise of 70.05 points, or 0.89 per cent.
Bank Nifty topped among its sectoral peers, surging by (1.35 pc), followed by Pharma (1.16 pc), PSU Bank (0.99 pc), IT (0.61 pc), Energy (0.44 pc), Auto (0.42 pc), Infra (0.42 pc), Metal (0.41 pc) and FMCG (0.23 pc).
However, Mid-cap and Small-cap alongwith realty ended marginally lower.
ITC, HDFC, ICICI Bank, HDFC Bank, Sun Pharma, Axis Bank, Yes Bank, Bharti Artel, SBI, Tata Motors, Wipro, Bajaj Auto, Reliance, Indusind Bank, Heromotoco, M&M, Power Grid, Idea, Infosys, Vedanta, ONGC and Maruti were top gainers.
Among the key losers included Bosch, L&T, BPCL, Asian Paints, NMDC, Cairn and Coal India.
Turnover in the cash segment moved up to Rs 13,901.85 crore compared with Rs 13,534.45 crore yesterday.
A total of 6,252.10 lakh shares changed hands in 6,401,901 trades and the total market capitalisation of NSE stood at Rs 9,391,068 crore.
