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Shrugging off the spike in food inflation and high interest rate worries, the BSE benchmark Sensex today surged by over 358 points to close at 18,449.31 on aggressive value buying in the recently beaten stocks and due to indications of a steady global economic recovery.
The Bombay Stock Exchange benchmark Sensex, which had gained 68 points in the previous session, spurted by 358.69 points to 18,449.31, even as the food inflation soared to over 17 per cent for the week ended January 22 from 15.57 per cent in the previous week.
The Sensex upsurge was mostly supported by the metal, realty, capital goods and banking sector stocks.
The broad-based National Stock Exchange index Nifty shot up by 94.75 points to 5,526.75 led by Hindalco, Reliance Industries, Larsen and Toubro and State Bank of India.
The US manufacturing data showed unexpected acceleration in January, the fastest pace in more than six years, signalling that the global recovery might be taking a strong hold.
European manufacturing too gained at the quickest pace in nine months, while UK production increased at a record pace in January.
Hindalco, the biggest aluminium producer, gained for the fourth day as manufacturing improved from China to the US, boosting the demand outlook. The stock gained 4.62 per cent to Rs 245.70 as copper advanced to record prices in London and New York, while aluminium gained by 0.4 per cent.
Foreign funds shifted focus to Indian stocks as most of the Asian markets were closed on account of the Lunar New Year holidays.
The two heaviest-weighted on the Sensex — Reliance Industries and Infosys — gained on buying at attractive low levels and favourable reports.
RIL gained 2.4 per cent to Rs 943.50 following a steep rise in crude oil prices and Infosys rose 0.98 per cent to Rs 3,115.85 on expectations of better earnings on hopes of a steady global economic recovery. US and Europe account for a substantial share of revenues for Indian IT firms.
The realty sector index gained the most by rising 3.93 per cent to 2,276 followed by capital goods index by 2.51 per cent to 13,390.47. The metal index rose 2.19 per cent to 16,477.32 and the banking index by 2.04 per cent to 12,111.66.
With the buying activity spilling over a wide-front, small-cap index rose 1.21 per cent to 8,464 and the mid-cap index by 1.09 per cent to 6,827.87.
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