The BSE Sensex surged over 500 points, while the Nifty ended close to the 8,200 mark as funds and retail investors went about creating fresh positions, driven by the government’s decision to refer MAT issue to a high-level committee.
Besides, a rebound in the rupee from the 20-month low also boosted the sentiment.
To find a solution to the ongoing controversies over the applicability of minimum alternate tax (MAT) on foreign institutional investors (FIIs), the government has referred the issue to a committee headed by Justice (retd) AP Shah.
Value-buying by funds and retail investors led the Sensex head towards its biggest daily gain in nearly four months, after the index closed at its lowest in 6-1/2 months in the previous session.
The 30-share BSE index Sensex surged 506.28 points or 1.9 per cent to 27,105.39 and the 50-share NSE index Nifty rose 134.20 points or 1.67 per cent to 8,191.50.
Barring consumer durables, all other BSE sectoral indices ended significantly in the green. Among them, realty index gained the most by 4.06 per cent, followed by auto 2.67 per cent, banking 2.23 per cent and infrastructure 1.83 per cent.
Hindustan Unilever , PNB , Eicher Motors , Allahabad Bank , Ajanta Pharma, IOB and Gillette are expected to announce results today— Rajalakshmi Nirmal (@crajalakshmic) May 8, 2015
Top five Sensex gainers were Tata Motors 5.18%, ICICI Bank 4.09%, Cipla 4.03%, Hindalco 3.5% and HUL 3.34%, while the major losers were Hero MotoCorp 2.23%, ONGC 0.96%, TCS 0.5%, Tata Steel 0.22% and NTPC 0.18%.
Equity brokers said the domestic sentiment was buoyed after Finance Minister Arun Jaitley had yesterday announced that a high-level committee will look into the controversial issue of Minimum Alternate Tax (MAT).
Furthermore, covering-up of short positions in several blue-chip stocks by speculators and positive cues from global markets supported the rebound.
Snapping its three-day losing streak, the Sensex recovered sharply by 374.72 points or 1.4 per cent to 26,973.83 in early trade with realty, banking, capital goods, auto and healthcare stocks leading the rebound.
The gauge had lost 891.48 points in the past three days.
The 50-share NSE Nifty regained the 8,100-mark by rising 111.55 points or 1.38 per cent to 8,168.85.
Brokers said the domestic sentiment was buoyed after Finance Minister Arun Jaitley had yesterday announced that a high-level committee will look into the controversial issue of Minimum Alternative Tax (MAT).
UK shares led a rebound in European equity indexes on Friday after early poll results showed Prime Minister David Cameron’s Conservatives were set to govern Britain for another five years.
Broader market sentiment was also supported by a return to calm in US and European government bonds after a recent sell-off, with investors holding fire ahead of key US jobs data due later in the session.
At 0707 GMT, the FTSEurofirst 300 index of pan-European shares was up 2.1 per cent at 1,578.68 points, with Britain’s FTSE 100 also up by a similar amount.
British defence group Babcock gained 11.6 per cent, while banking group Lloyds rose 7.5 per cent.
Asian shares held firm on Friday on signs global bond markets are stabilising after a big sell-off and sterling jumped about one per cent after UK exit polls forecast the ruling Conservatives taking the most seats in Parliament.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, while Japan’s Nikkei ticked up 0.2 per cent from one-month low hit on Thursday.