Snapping two-session losing run, the market benchmark Sensex zoomed 438 points today to 25,338.58 -- its biggest single-day gain in a month -- on value-buying in banking and pharma stocks amid accelerated foreign fund inflows after the US Fed softened stance on rate hike.
The 50-share NSE Nifty reclaimed the 7,700-mark by gaining 138.20 points or 1.82 per cent to 7,735.20.
Asian and European markets cheered the US Federal Reserve's Chair Janet Yellen comments yesterday that the central bank needed to proceed cautiously on raising interest rates in midst of global risk factor.
Moreover, covering-up of short positions ahead of tomorrow's expiry of March series in derivatives segment and hopes of a rate cut by Reserve Bank at the monetary policy review on Tuesday, accelerated buying further.
The rupee, rising by close to 20 paise against the dollar also had its bearing on the market.
"Being the eve of derivatives expiry, caution was the watchword, especially early in the day. However, that did not dampen sentiment," said Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services.
Asian Development Bank (ADB) lowered 2016-2017 growth forecast, but expectations of a RBI rate cut soon seems to be encouraging investors, he added.
The 30-share BSE Sensex opened gap-up at 25,062.06 and traded between 25,358.84 and 25,055.42 before ending at 25,338.58, showing a rally of 438.12 points or 1.76 per cent.
The gauge had lost over 437 points in the last two days.
Tata Steel emerged as the best performer and closed 6.75 per cent up at Rs 324.40 after the government extended the safeguard duty on some steel imports by two years till March 2018, to protect domestic industry.
Sun Pharma ended 2.21 per cent higher at Rs 811.60 as the drug major forayed into Japanese prescription market by acquiring 14 brands from Swiss drug firm Novartis for over Rs 1,940 crore.
Lupin too bounced back, surging over 5 per cent, after the company said the USFDA observations about Mandideep facility were "minor in nature".
Meanwhile, foreign funds continued their buying spree and bought shares worth Rs 513.45 crore yesterday as per provisional data.
Globally, Asian markets, like Hong Kong and Singapore ended 2.15 per cent and 2.77 per cent higher, respectively while Japan's Nikkei fell 1.31 per cent.
Europe were also in better shape with the UK's FTSE up 1.72 per cent, Germany's DAX 1.73 per cent higher and France's CAC stronger by 1.91 per cent.
