Agressive dollar selling by the central bank, the move to ease External Commercial Borrowings norms and the decision to partially remove a few restrictions on capital outflows pulled the rupee out of early lows - it very nearly breached its previous all-time low this morning - and lifted the key Indian stock indices to a buoyant close on Wednesday.
Despite weak global cues, the market opened on a strong note, turned a bit listless mid way through the session, but rallied sharply later on to sign off with handsome gains. Investors also appear to be betting on hopes that the new RBI governor Raghuram Rajan will bring in a new approach with regard to curbing forex volatility. Some bargain hunting after Tuesday's terrible setback too aided the market's impressive surge.
The BSE benchmark Sensex, which vaulted to 18,612.60, ended with a big gain of 332.89 points or 1.83% at 18,567.55, while the broader 50-stock Nifty index of the National Stock Exchange closed at 5448.10, gaining 106.65 points or 2%. The Nifty touched a high of 5460.25 during the day.
Metal stocks had a good outing, buoyed by recent upbeat economic data out of China. Healthcare, automobile, information technology, bank, oil and power stocks too mostly ended with impressive gains.
Capital goods, PSU and consumer durables stocks were also in demand. FMCG and realty stocks were mostly subdued, but managed to end well off their lows. After a lackluster start, midcap and smallcap stocks gained in strength as the session progressed.
BHEL, up 6.2%, was the top performer in the Sensex. Tata Motors, Bharti Airtel, ICICI Bank, Hindalco, Dr Reddy's Laboratories, Cipla, Tata Consultancy Services, Bajaj Auto and Tata Steel gained 3% - 5%.
Jindal Steel & Power, Infosys, Reliance Industries, ONGC, Sun Pharmaceutical Industries, NTPC, Hero Motocorp, Sesa Goa, Coal India, Mahindra & Mahindra, Tata Power, HDFC and State Bank of India all ended higher by 1% - 3%.
Ranbaxy Laboratories, up 8.7%, topped the Nifty gainers list. Jaiprakash Associates surged 6.2%. Lupin, IndusInd Bank, Ultra Tech Cement, Cairn India, NMDC, Axis Bank, Asian Paints, HCL Technologies, Kotak Bnak, Ambuja Cements, Bank of Baroda, BPCL and Reliance Infrastructure also ended on a high note.
The market breadth was strong. Out of 2441 stocks traded on BSE, 1364 stocks moved up. 927 stocks declined and 150 stocks ended flat.