The benchmark BSE Sensex today rebounded by 271 points and NSE Nifty reclaimed 8,700-level, while the rupee recovered from two-month low amid hopes that Parliament would finally pass the Insurance Bill.
At the bullion market, gold prices fell by Rs 130 to Rs 26,320 per 10 grams today amid a weak trend globally in precious metals and subdued domestic demand.
Investors also cheered the IMF raising its growth forecast for the Indian economy for the current fiscal to 7.2 per cent. The bullish sentiment was supported by buying activity ahead of IIP numbers for January and retail inflation data for February, brokers said.
Meanwhile, industrial production grew at 2.6 per cent in January and retail inflation for February inched up to 5.37 per cent against 5.11 per cent, data released after trading hours.
Snapping its three-day falling streak, the 30-share Sensex, staged a strong comeback to settle 271.24 points, or 0.95 per cent, higher at 28,930.41 on the back of across-the-board spurt in bluechip stocks.
The gauge had lost nearly 790 points in the past three straight sessions including over 604 on Monday, its biggest single-session drop in two months, tracking global sell-off on fears of a hike in US rates soon after a stronger-than-expected jobs data.
The 50-share Nifty on the National Stock Exchange too closed above the psychological 8,700-level by surging 76.05 points, or 0.87 per cent to close at 8,776. It had shed 237.80 points in the preceding three sessions.
Globally, most Asian markets closed up and European indices were trading firm.
In sync with stock markets, the rupee also showed some strength and recovered from two-month by rising 28 paise to close at 62.50 against US dollar at the Forex market.
Analysts said passage of the insurance bill could raise optimism that other stalled reforms would also move ahead.
While the government has promulgated an ordinance to hike FDI in insurance business from 26 per cent to 49 per cent, a bill in this regard introduced in Rajya Sabha today. The bill was passed by the Lok Sabha last week.
Shares linked to insurance saw good activity with Reliance Capital leading the charts with over 10 per cent gains. Max India, Aditya Birla Nuvo and Bajaj Finserv also moved up.
Sectorwise, the BSE Power index gained the most by rising 2.27 per cent, followed by Realty 1.53 per cent, Consumer Durables 1.49 per cent, Metal 1.43 per cent, FMCG 1.32 per cent and Auto 1.22 per cent.
