Global cues drive rally: Sensex up 451 pts, Re rises 70 paise

Indian markets made a rollicking start to the week with the Sensex soaring over 451 points and the rupee surging by 70 paise to nearly two-week highs today on robust capital inflows tracking Chinese reform initiatives and hopes that the US economic stimulus would be extended.
The benchmark S&P BSE Sensex opened 171 points higher and stayed in positive territory through the day to end at an almost two-week high of 20,850.74, a rise of 451.32 points, or 2.21 per cent. It was the biggest gain since October 18. Last week, the 30-share bluechip index closed 266 points lower.
The Asian markets were in a buoyant mood after declaration of big-bang economic and social reforms announced at the Chinese Party Third Plenum. This optimism rubbed off on Indian equities as well, said traders.

Even as UBS downgraded Indian stocks to "neutral" from "overweight," the government today said it needs to add to measures taken to give momentum to growth, which was affected by the global financial crisis in 2008. "We acknowledge that more needs to be done," Economic Affairs Secretary Arvind Mayaram said today.
US Fed chief Ben Bernanke is scheduled to speak tomorrow and the release of FOMC minutes is expected on Wednesday.
"Markets are now looking forward to further clues from Bernanke as he speaks tomorrow and later on details of the FOMC meet in October would be made public. Plus, the jobless claims data is expected later," said Sanjeev Zarbade, Vice President - Private Client Group Research, Kotak Securities.

The rupee climbed a hefty 70 paise, its biggest gain since October 3, to end at 62.41 versus the dollar. This is the rupee's third day of gains and best close since November7.

The local currency, which led Asian peers, rose amid bets that some Federal Reserve speakers, including New York Fed William Dudley, will talk in favour of keeping USD 85 billion a month stimulus intact, like Chairman-nominee Janet Yellen.
Additionally, hopes of the Reserve Bank's Rs 8,000 crore open market operation today to boost liquidity in the banking system, helped the rupee cement gains.
The rupee, which had risen on Thursday and Friday, had fallen for the fifth consecutive week after it slid by 64 paise against the dollar in the November 11-14 period.