RBI Governor Raghuram Rajan late yesterday unveiled a slew of powerful measures to shake up and liberalise banking system and rescue the battered domestic currency while addressing liquidity constraints.
Faced with stubborn inflation, record current account deficit amid fading investment confidence, the Indian economy is struggling to recover after growing at its slowest pace in a decade to 4.4 per cent growth in April-June quarter.
The long-pending Pension Bill was passed in the Lok Sabha yesterday, giving further push to reform measures.
The stock market reacted positively to the overnight developments and opened on a strong note. The Nifty soared on frenzied buying along with short-covering and continued the uptrend through out the day before ending with robust gains.
Frontline banking heavyweights spearheaded the rally with the sectoral index Bank-Nifty zooming by a hefty 837 points. FMCG, energy, auto, metal, capital goods and realty too attracted huge buying interest. Technology stocks saw heavy unwinding after recently rally and recovery in rupee.
The market mood is positive at this juncture and the rally was fuelled by expectations the new RBI Governor may consider easing interest rates in near future, traders said.
Elsewhere in Asia and emerging markets, stocks ended mixed amid concerns on US Fed tapering stimulus measures and investor cautiousness ahead of BoE and ECB meets.
The 50-share Nifty zoomed by 144.85 points, or 2.66 per cent, over its last close to finish at 5,592.95. The NSE barometer touched a high of 5,625.75 in early trade.
Axis Bank topped the gainer list, surging 15.72 per cent. Kotak Bank, SBIN, ICICI Bank, Bank of Baroda, DLF, BHEL, HDFC Bank, PNB and IndusInd Bank were other smart movers.
Key laggards included Sesa Goa, TCS, Infosys, Lupin, HCL Tech, GAIL, Ranbaxy, Tata Power, Power Grid and Hindalco.
Turnover in the cash segment rose to Rs 14,291.42 crore from 11,141.35 crore yesterday. A total of 7,555.17 lakh shares changed hands in 72,58,898 trades. The market capitalisation stood at Rs 59,70,734 crore.