The benchmark Sensex surged 371 points today, the biggest gain in almost a month, as Reliance Industries led energy stocks higher after the government allowed the company to increase the price of natural gas.
Reliance, with a 4.58 per cent gain, and Oil & Natural Gas Corporation, along with financial and IT stocks lifted the Sensex, helping it to close above the 21,000 level.
Oil & gas and realty stocks climbed the most among the 12 BSE sectoral indices. The consumer durables sector index fell.
The S&P BSE Sensex opened higher than yesterday's close and traded steady for the first two hours. It then shot up and touched the day's high of 21,117.99 before closing at 21,079.72, up 371.10 points or 1.79 per cent.
It was the biggest gain for the index since the 388-point rise on November 25. Over the past week, the Sensex has advanced 364 points.
The Cabinet yesterday allowed Reliance to increase gas prices from April even as output at its main Dhirubhai 1 and 3 fields in the KG-D6 block has dropped. The price hike was allowed provided the company furnishes bank guarantees to cover its liability if gas-hoarding charges are proved.
Oil Minister M Veerappa Moily today said higher gas prices would encourage exploration, helping to raise domestic production and cut dependence on imports.
Foreign institutional investors bought shares worth a net Rs 2,264.11 crore yesterday, according to provisional data with the stock exchanges.
The Sensex had dropped 151 points yesterday after the US Federal Reserve said it would start tapering its stimulus programme in January, a move that would reduce the funds available to invest in local stocks.
