After gaining nearly 500 points in the last three days, the 30-share index opened with a 100-point gain on strong Asian cues. It consolidated gains further as the rupee clawed back to 54-levels intra-day.
The sentiments were supported as European markets opened higher on hopes that global central banks will resort to a fresh round of stimulus as the Eurozone crisis deepens.
All eyes are on Federal Reserve chief Ben Bernanke who is scheduled to speak to US Congress later today and investors expect to hear about quantitative easing, said traders.
Gains in Sensex were led by banks including HDFC Bank, and ICICI Bank up over 3.5 per cent as the belief gained further ground that Reserve Bank will cut rates on June 18.
Index heavyweight RIL closed 1 per cent up on its 30th AGM while Infosys and ITC ended 1-2 per cent higher. Auto counters including Maruti, M&M and Hero also rose 2-3 per cent today.
Factors like crude oil prices at USD 85 a barrel and rupee trading near 55-level to a dollar enthused investors further to buy as across the market over 1,500 stocks rose with investor wealth surging Rs 42,000 crore to Rs 59 lakh crore.
With 25 out 30 constituents closing higher, Sensex ended at 16,649.05, a level last seen on May 7, up 194.75 points.
Similarly, the 50-share NSE Nifty regained the key 5,000-level by rising 52.55 points to 5,049.65.
"Markets were inspired by hopes of rate cut and positive sentiments after Manmohan Singh announced a big push to infrastructure. European and Asian shares were up on speculation that central banks will respond with more stimulus," said Sharmila Joshi of Fairwealth Securities.
The government had yesterday announced 2012-13 ambitious targets for investments in ports and aviation sectors, power generation, coal production and railway freight carriage. (MORE)
