Sensex soars 300 points; banks, IT lead rally

The BSE Sensex surged over 300 points on Thursday tracking higher Asian stocks and a weak dollar, which slumped to an eight-month low against a basket of currencies. The broader Nifty jumped around 100 points, while the rupee strengthened to below 62 per dollar.

Hopes that central banks in the US and Europe would continue their super-loose policies, in the face of the shutdown of the US government, drove sentiments. India, like other emerging markets, benefits from ultra-low interest rates in the US.

The rupee rose to 61.82 per dollar tracking weakness in the dollar.

Indian markets have fallen sharply since the Reserve Bank hiked the key repo rate last month. However, with the rupee stabilising, there is some optimism on the Street.

Market analyst Sarvendra Srivastava said investors should exit Nifty shorts and 5,800 puts, now that the Nifty has regained the key 200 day exponential moving average.

Madhav Dhar of the GTI Capital told NDTV that markets are fairly priced.

Beaten down banking stocks saw buying interest and the NSE's Bank Nifty edged above the key 10,000 levels, rising around 2 per cent.

Technology shares gained as brokers raised the sector's earnings estimates, citing higher demand from the United States and Europe.

Among IT shares, Tata Consultancy Services WAS up around 4 per cent, while Tech Mahindra gained over 3 per cent. Infosys, which reports Q2 earnings next week, was up 0.6 per cent.

(With inputs from Reuters)