Sensex jumps 215 points to close at 3-month high

The Sensex rose a little more than one per cent today to its highest close in three months as expectations for continued foreign buying, as part of a powerful rally in global equities, lifted blue chips, such as ITC.

Global shares hit their highest level in almost five years today, a day after the S&P 500 closed at another record high, on continued optimism over last week's strong US jobs report. Japan's Nikkei average jumped 3.6 per cent to its highest in nearly five years.

Hopes of foreign inflows and government efforts to revive the economy are supporting markets after the Reserve Bank of India cut interest rates for a third time this year, although it signalled little room for further policy easing.

Foreign funds have bought a net $680 million of Indian stocks in the three sessions to May 3, taking the 2013 net buying to a total of $12.17 billion, regulatory data shows.

"Worldwide economies are reviving due to quantitative easing and countries like India should continue to benefit from portfolio flows in the medium term," said R K Gupta, managing director at Taurus Mutual Fund.

The BSE Sensex rose 1.09 per cent, or 215.31 points, to end at 19,888.95, its highest close since January 31.

The Nifty rose 1.21 per cent, or 72.50 points, to end at 6,043.55, closing above the psychologically important 6,000 level, posting its highest close since January 30.

Among blue chip stocks, ITC gained 2.8 per cent, while Tata Motors rose 2.5 per cent.

Private sector lenders also gained, with ICICI Bank and HDFC Bank rising 1.9 per cent each.

DLF Ltd rose 2.9 per cent on its plans to sell up to 81 million shares through an institutional placement. The price range and size are yet to be determined, according to the term sheet seen by Reuters.

Sintex Industries Ltd shares rose 4.8 per cent after its January-March profit surged 65.5 per cent from a year earlier.

Aban Offshore Ltd rose 3.5 per cent after signing a contract to deploy a jack-up rig, with an estimated revenue of about Rs 828 crore.