It has been the biggest gain in absolute terms for Sensex in a day since its record 2,110-point or 17.3 per cent gain on March 18, 2009.
The benchmark Sensex at the BSE gained 2.7 per cent or 728.7 points on Thursday, closing at a five week high of 28,075.
It has been the biggest gain in absolute terms for the index in a day since its record 2,110-point or 17.3 per cent gain on March 18, 2009, when the UPA was voted back to power.
The markets, however, have never reacted in such a manner to a rate cut action by the central bank.
Even when former Reserve Bank Governor D Subbarao had announced a surprise 50 basis points cut in repo rate on April 17, 2012, the Sensex had risen by only 207 points or 1.2 per cent.
Market experts see Thursday’s decision as an inflection point of sorts that signals the change in the direction of rate movement, and the exuberance at the bourses as an indication of the changing sentiment.
While the Sensex soared on Thursday, companies operating in rate-sensitive sectors were the biggest gainers. The advance to decline ratio in the markets were heavily tilted towards the advances with three stocks rising for every two declines. While the real estate and the banking indices at the BSE rose the most by 8 per cent and 3.3 per cent respectively, the auto index rose 2.1 per cent during the day.
Real estate developers HDIL, Prestige and Indiabulls Real Estate were the top gainers closing respectively with gains of 18.6, 11.9 and 10.6 per cent.
Among banks, SBI was the top gainer at 5 per cent. ICICI bank and Canara Bank were other major gainers at 4.6 and 4.1 per cent, respectively.