As expected the Reserve Bank of India (RBI) in its bi-monthly policy review kept the key lending rates and CRR unchanged but slashed statutory liquidity ratio (SLR) by 50 basis points to 22.5 per cent.
Cut in SLR will bring back about Rs 40,000 crore of liquidity into the system.
Market players were also encouraged by reassuring Chinese factory data and good FII inflows. Foreign institutional investors bought shares worth a net Rs 234.49 crore yesterday, as per the provisional statement from the stock exchanges.
Most of the Asian stocks ended higher.
The 50-share Nifty resumed higher at 7,375.35 and traded between a high of 7,424.95 and a low of 7,342.15 before closing at 7,415.85, a gain of 53.35 points, or 0.72 per cent, over the previous close.
Tata Steel surged by 6.88 per cent, SSLT by 6.41 percent, energy major Coal India rallied by 5.37 percent, Grasim by 5.29 percent, DLF 4.85 percent. Other gainers included ONGC, UltracemCo, NMDC, Ambuja Cem and BHEL.
While, Dr Reddy, HCL Tech, GAIL, IndusindhBk and Kotak Bank incurred profit booking.
Turn-over in the cash segment jumped to Rs 21,570.93 crore from Rs 17,717,69 crore yesterday. A total of 13,085.65 lakh shares changed hands in 91,65,687 trades, while market capitalisation stood at Rs 84,85,262 crore.