Mumbai: India’s main stock index rallied 5.1% on Monday, its biggest one-day rise since early December, after a fresh US rescue package for the financial sector boosted investor confidence across Asia.
Battered financial shares that had been on the mend in the past two weeks were among the main gainers, as the US plan to buy up to $1 trillion of toxic assets from banks bolstered global sentiment towards the sector.
Reliance Industries, which has the heaviest weight in the main index, rallied 7.6% to Rs1,439.80, its best close since last 4 November, as the energy giant readies to begin gas supplies from its Krishna Godavari basin field off India’s east coast.
Tata Motors, India’s largest vehicle maker, rose 3.2% to Rs166.05 ahead of the launch of its Nano, slated to be the world’s cheapest car at around $2,000. It rose more than 8% during trade.
The 30-share BSE index, rose 457.34 points to 9,424.02, its highest close since 13 February 13, with all but one component rising. The 50-share NSE index rose 4.73% to 2,939.90, its highest close since 13 February.
The benchmark, which had gained more than 7% in the past two weeks, has trimmed its losses in 2009 to 2.3%.
Deven Choksey, managing director of K R Choksey Shares, said the rally was unexpected and was prompted by the world market recovery and partly by the rupee’s rebound after hitting an all-time low earlier this month.
Markets across Asia and Europe climbed and US stocks futures were set to rally after Washington’s latest move to cleanse the US banking system of toxic assets that were blocking lending and worsening a deep US recession. Top lender State Bank of India climbed 7.3% to Rs1,023.45, ICICI Bank added 7.4% to Rs346.65, HDFC Bank gained 5.6% to Rs884.65, while Housing Development Finance Corp rose 8.4% to Rs1,528.80.
Commodity stocks rose as metal prices rallied in London and Shanghai.
Tata Steel jumped 10.4% to Rs194.40 rupees, Hindalco Industries gained 9.4% to 52.05 and Sterlite Industries added 5% to Rs331.40.