New Delhi: The Benchmark Sensex surged 500 points, which is the highest since October 2015, while NSE Nifty retook the 8,400-mark in early session today.
The rally in domestic equities was caused by the large jobs data in the US, which indicated that the world's biggest economy is on the path of recovery.
Monsoon's coverage of most part of India and a stronger possibility of passage of the deadlocked GST Bill in Rajya Sabha gave more reasons to cheer.
After opening higher, the sensex ended at an 11-month high of 27,626.69, up 499.79 points, or 1.84 per cent — its biggest single-day gain since May 25 when it had risen 575.70 points.
Monday's closing is highest since August 19 last year when it ended at 27,931.64.
The 50-share NSE Nifty recaptured the 8,400-mark before closing at 8,467.90, a gain of 144.70 points, or 1.74 per cent.
Metals led the rally, followed by auto, banking, PSU and realty. Covering-up of short positions fed the upsurge.
Most other Asian markets closed on a strong footing following strong weekend rally in the US.
Japan's Nikkei remained at the forefront, jumping 3.98 per cent, followed by Hong Kong's 1.54 per cent, Singapore's 0.97 per cent and the Shanghai Composite's 0.23 per cent.
European bourses are too trading firmly higher, with Frankfurt' DAX up 1.20 per cent, Paris CAC 0.70 per cent and UK's FTSE 0.70 per cent.
Meanwhile, FPIs net bought shares worth Rs 330.62 crore on Friday, as per provisional data from the stock exchanges.
The domination was near complete, as 29 scrips out of 30-share Sensex pack ended higher while Axis Bank closed lower.
Adani Ports was the top gainer by rising 4.78 per cent. Tata Motors went up 4.15 per cent after the company's Jaguar Land Rover reported 22 per cent jump in global retail sales in first half the year.
So did ICICI Bank (3.44 per cent), SBI (2.84 per cent), Maruti Suzuki (2.84 per cent), Coal India (2.84 per cent), Tata Steel (2.72 per cent) and Hero MotoCorp (2.52 per cent).
Among BSE sectoral indices, metal rose the most by 2.46 per cent, followed by auto 2.19 per cent, banking 2.07 per cent, PSU 2.06 per cent and realty 2.05 per cent.
Mid-cap and small-cap firmed up 1.49 and 0.79 per cent, respectively, on fresh buying by retail investors.
The top 10 highlights:
- Following the US jobs data report that was released last week Indian stock markets participated in a global rally. The rally was lead by Japan in the Asian markets, surging 3.5 per cent. Wall Street rose nearly 1.5 per cent maintained by the strong jobs data on Friday.
- Many analysts are hoping that US Federal Reserve will delay its rate hike due to Brexit, in spite of a large number of US jobs data. Also global central banks and European Union are expected to to further loosen their monetary policy.
- All stocks led by banking stocks on the Nifty50 index were trading higher. ICICI Bank, Bank of Baroda and SBI were up between 2 per cent and 2.5 per cent, encouraged by hopes of a rate cut following good progress of monsoon rains.
- The rural economy of India has been hit by back-to-back droughts, so normal monsoon rains are will be needed to boost consumption-led growth.
- Real estate and auto stocks also outperformed today.
- Private lender IndusInd Bank will start the June quarter earnings season today.
- The goods and services tax or GST, which started as the biggest tax reform since independence, may be passed in parliament soon. According to estimates, the implementation of GST could boost India's GDP by 1-2 per cent.
- Domestic macro indicators have been improved over the last few years due to the number of global brokerages that have turned "overweight" on India. This has added to positive investor sentiment.
- According to HSBC, India has one of the most convincing growth stories. It also added that the functioning of the Seventh Pay Commission's recommendations is seen to act as another catalyst for consumption in India.
- Despite huge instability in global currency markets post Brexit, rupee has relatively outperformed, which is a positive factor for the rally in equities.
(With PTI inputs)
