Overall on the BSE, 1,522 stocks -- or about six out of every ten traded -- closed in the green, helping investor wealth surge by Rs 1 lakh crore in the session. Oil & gas and realty led 12 out of the 13 sectoral indices higher.
The benchmark Sensex, which had lost 151 points in the previous session, surged by 371.10 points, or 1.79 per cent to end at 21,079.72. This is the best gain since the index rose by 387.69 points on November 25. For the week, the Sensex rose by 364.14 points, the best gain in three.
Reliance Industries led the rally in refinery sector by surging 4.58 per cent after the Cabinet decided to allow the energy major to double the price of natural gas from April. Oil & Natural Gas Corp (ONGC) also spurted 3.93 per cent. HDFC Ltd, ICICI Bank, Tata Consultancy Services (TCS), Mahindra & Mahindra Ltd
and Hindustan Unilever (HUL) were among the 27 winners in 30-share Sensex.
The broad-based National Stock Exchange index Nifty shot up by 107.6 points, or 1.74 per cent, to 6,274.25. Also, the SX40 index of MCX Stock Exchange jumped by 189.01 points to end at 12,525.54.
Brokers said the domestic stocks markets were buoyed by the RBI decision to hold rates and marginal amount of taper announced by the US Fed. Positive foreign flows after the announcement also supported sentiments, they added.
Sugar sector stocks were back in demand after the government decided to provide interest free loan to cash-starved sugar millers to pay sugarcane farmers. Shakti Sugar shot up by 7.84 per cent, Dhampur Sugar Mills Ltd by 1.97 per cent and Shree Renuka Sugars Ltd by 1.01 per cent were among major gainers.
Across the market, 14 stocks in Group A, including Infosys, JSW Steel, Lupin, Maruti and Wipro, hit 1-year highs.
However, the rupee was last trading almost flat at 62.15 against the US dollar - Rupee rose 10 paise to close at 62.04.
* BSE index gains 1.79 pct; NSE ends 1.74 pct higher
* Reliance Industries surges after govt allows gas price hikes
* Infosys close to getting biggest weighting in BSE index
* Foreign investors buy Indian shares day after Fed tapering
Indian shares post biggest single-day gain in nearly a month; Reliance Industries rallies
(Reuters) Indian shares gained nearly 2 percent on Friday to mark their biggest single-day gain in nearly a month as Reliance Industries surged after the government allowed it to charge higher prices for gas from April.
Software services exporters also rallied after Accenture Plc said it expects its consulting business to turn the corner as orders rise, building on strength in its outsourcing unit while reporting better-than-expected quarterly results.
Shares had fallen on Thursday after the Federal Reserve's decision to start a limited reduction in bond purchases sparked fears of foreign investor selling, like the one in summer when markets were roiled by similar fears.
However, overseas investors bought 22.64 billion rupees ($364.4 million) worth of Indian shares on Thursday.
Foreign investors' strong buying this year, totalling more than $18 billion in net investments, has been key to the stock market's performance and was behind the indexes' surge to record highs on Dec. 9.
"Indian markets have always been very dependent on foreign flows for continuation of the uptrend. My apprehension, however, is what would happen to flows when tapering actually starts next month," said R. K. Gupta, managing director of Taurus Mutual Fund.
The benchmark BSE index rose 1.79 percent, or 371.10 points, to end at 21,079.72 marking its biggest single-day gain since Nov. 25. It gained 1.8 percent for the week.
The broader NSE index rose 1.74 percent, or 107.60 points, to end at 6,274.25, marking its highest weekly close since Nov. 1. It gained 1.7 percent for the week.
Reliance Industries Ltd surged 4.8 percent, marking its biggest single-day gain since May 27 after the government allowed the company to charge higher prices for gas from April.
The move came after the company offered financial guarantees to the government to settle any claims against it over a shortfall in its gas output.
Shares in software services companies gained after Accenture Plc's results. Tata Consultancy Services Ltd gained 1.9 percent, Infosys Ltd rose 1.1 percent, Wipro Ltd jumped 3.7 percent and Tech Mahindra Ltd advanced 2.9 percent. Infosys made a record high at 3,573 rupees and is poised to overtake ITC Ltd as the stock with biggest weighting in the BSE index and the NSE index.
Shares in sugar companies rose after the federal cabinet approved a scheme providing interest-free loans to sugar mills as part of a bail-out package.
Bajaj Hindusthan Ltd rose 2.8 percent, Shree Renuka Sugars Ltd ended higher 1.3 percent and Balrampur Chini Mills Ltd gained 2.2 percent.
Maruti Suzuki India Ltd ended higher 1.6 percent after making a record high at 1.830 rupees earlier in the day on hopes of lower raw material costs of imported parts after the U.S. dollar hit a five-year high against the yen.
However, among stocks that fell, Parsvnath Developers Ltd dropped 1.2 percent on going ex-dividend.
FACTORS TO WATCH
* Dollar buoyant after Fed taper, euro slips on S&P
* Brent holds above $110, set for weekly rise
* Cash crunch fears hit China stocks