Besides, short-coverings ahead of tomorrow's settlement of derivative contracts for June and strong cues from overseas markets, moved the equities up. There was buying across the segments and all the sectoral indices ended in gains, with FMCG and metal sectors at the forefront. FIIs, key drivers behind the current rally, have remained net buyers in last few days, picking up shares worth Rs 819.41 crore yesterday as per the provisional exchange data.
Brokers said Finance Minister Pranab Mukherjee's comment that the economy will grow by 8.5 per cent in 2011-12 and the recent hike in fuel prices will not have much impact on the fiscal deficit, provided some relief to investors.
The 30-share Bombay Stock Exchange index, Sensex, which had gained nearly 943 points in the last four sessions, advanced further by 201.41 points or 1.09 per cent to 18,693.86, a level last seen on May 2. The broad-based National Stock Exchange index Nifty traded above 5,600 mark level by adding 55.15 points to settle at 2-month hight of 5,600.41.
"The Sensex today moved northwards buoyed by short- covering ahead of June Futures & Options expiry tomorrow." said Religare Securities Executive VP Rajesh Jain. He added, Mukherjee's statement that the economy will achieve a growth of about 8.5 per cent this fiscal gave further push to the market.
"The market sentiment received a boost from the fact that FIIs have started buying Indian equities from last Friday. Also, short-coverings as well as a rebound in global equities have given strength to the Sensex," said Alex Mathew, Research Head, Geojit Bnp Paribas Financial Services.
Major contributers to the Sensex gains were ITC (2.79 pc), RIL (1.69 pc), HDFC Bank (2.65 pc), SBI (1.81 pc), TCS (1.44 pc), HUL (2.72 pc), Tata Steel (2.38 pc), HDFC (0.99 pc), Infosys Tech (0.63 pc) and Sterlite Ind (3.45 pc). Overall, 23 of the 30 Sensex counters finished with gains, while others closed with losses. Other gainers were REL Infra (2.38 pc), BHEL (2.07 pc), Maruti Suzuki (1.59 pc), and Tata Motors (1.48 pc).
However, ONGC declined by 2.13 per cent, Bajaj Auto by 1.32 per cent and Jaiprakash Associates by 1.20 per cent. Among the sectoral indices, BSE-FMCG spurted by 2.58 per cent, Metals by 1.52 pc and Bankex by 0.96 pc.
On the global front, most of the major stock markets ended in the green amid hopes that Greek debt crisis would ease soon. CNI Research CMD Kishor Ostwal said some clarity on Greek's front, amid investors hope that austerity measures demanded by international lenders will be approved by its Parliament today, boosted global sentiment. In Asia, key indices from Japan, Singapore, South Korea and Taiwan finished in the green, while Shanghai Composite index closed in the red. The Hang Seng closed nearly flat.
European markets too were trading higher in mid-session deals. Key indices from France, Germany and Britain were up by over one per cent. Overall, the market breadth at BSE remained positive as 1,795 scrips ended in the green while 1,056 that finished in the red. The total turnover rose further to Rs 3,088.40 crore from Rs 2,824.01 crore yesterday.
