Bourses withstood the shock of growth slowdown amid deteriorating macroeconomic fundamentals in India and surged for the third straight session on across the board buying as the benchmark Nifty today jumped 79 points and crossed 5,500 mark on National Stock Exchange (NSE).
Global factors like growing signs of optimism over the Chinese and European economies following faster-than-expected expansion in manufacturing and easing fears of a US strike on Syria boosted the emerging markets, including India.
Heavyweights from FMCG, energy, financial, healthcare, metal and capital goods sectors spearheaded the rally.
Indian economy continued to remain in doldrums, pulled down by a contraction in mining and manufacturing activity as GDP grew by 4.4 per cent in the first quarter of FY14, the slowest pace since the 2008 financial crisis.
The gross domestic product (GDP) had expanded by 5.4 per cent in the April-June quarter of the last fiscal. India's manufacturing PMI also fell to 48.5, from 50.1 in July, posting the first contraction in more than four years.
After a good start despite unfavourable domestic macro cues, shares maintained their upward momentum throughout the day with the key index retracing the 5,500 mark. Profit taking in auto shares due to dismal August sale numbers capped gains.
Moreover, assurances from Prime Minister Manmohan Singh and hopes that Government may cut plan expenditure to achieve fiscal deficit target also lifted investor confidence, traders said.
The 50-share index galloped by 78.95 points, or 1.44 per cent, over its last close to settle at 5,550.75.
JP Associates, IndusInd Bank, Tata Steel, DLF, Maruti, Ranbaxy, Axis Bank, Reliance, Hindalco and IDFC were among the prominent gainers from the Nifty bunch.
Key losers included Kotak Bank, M&M, Tata Power, ACC, HeroMoto, HDFC Bank, Ambuja, Infosys, Sesa Goa and NTPC.
Turnover in the cash segment fell sharply to Rs 9,654.42 crore from Rs 16,681.05 crore last Friday. A total of 5,725.30 lakh shares changed hands in 55,13,114 trades. The market capitalisation stood at Rs 59,25,868 crore.
