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The Sensex reclaimed the 28,000 mark and Nifty settled above 8,500, led by an upsurge in rate-sensitive stocks.
The benchmark indices began the August F&O series in a spectacular manner on hopes of a rate cut by the RBI at its policy meet on August 4.
The roadmap unveiled by the government for recapitalisation of PSU banks, encouraging Q1 results from heavyweights such as ICICI Bank, the cabinet nod for an amended GST bill and favourable cues from the Asian front further bolstered the positive sentiment on Dalal Street.
The benchmark BSE Sensex reclaimed the 28,000 mark, spurting by 409 points or 1.4% at 28,114 and Nifty settled above the 8,500 mark at 8,532, gains of 111 points.
The broader markets rose in tandem with their largecap counterparts; the BSE Mid-cap index was up 1% at 11,273 and small-cap index was up 0.9% at 11,830.
The market breadth was in favour of the bulls; out of a total 3,001 stocks traded on the BSE, there were 1,655 advancing stocks as against 1,215 declines.
The RBI has already cut interest rates by 0.75% thus far this year.
The satisfactory monsoons, a decline in global commodity prices and neutral stance by the Federal Reserve have raised hopes of a further rate cut by the central bank at its third bi-monthly policy review on August 4.
The government proposed to infuse Rs 70,000 crore in PSU banks over four years as a part of the bank recapitalization plan.
The government will infuse Rs 25,000 crore in this fiscal itself, which is much higher than the amount earmarked in this year's Budget.
ICICI Bank reported a better-than-expected 12% year-on-year (YoY) jump in its standalone net profit at Rs 2,976 crore for the quarter ended June 30, against an average analyst estimate of Rs 2,904 crore for the first quarter of current fiscal.
On Thursday, the cabinet approved a bill on the goods and services tax that incorporates recommendations made by a select committee of Parliament.
The rupee was trading marginally lower at 64.07 to the US dollar compared to the previous close of 64.04 due to appreciation of the American currency overseas.
Meanwhile, Larsen & Toubro, CESC, Bharati Shipyard, GlaxoSmithKline Pharma, Mahindra Lifespace, Karur Vysya Bank, Sun TV and Suzlon Energy are scheduled to announce their June quarter earnings during the day. SECTORS & STOCKS All the sectoral indices ended in the green, with the exception of the oil index.
The rate-sensitive banking, auto and metal sectors led the way ahead of the RBI monetary policy scheduled on Tuesday.
The banking sector was in the limelight through the day.
ICICI Bank surged by 3.9% at Rs 302 after the private lender reported better-than-expected results for the June quarter.
The PSU banking shares also registered stellar gains after the government announced its recapitialisation plans.
The country largest largest lender State Bank of India soared by 5.2% at Rs 270 to top the gainers list on the BSE.
Among other public sector banking stocks, Union Bank of India, IDBI Bank, Canara Bank, Allahabad Bank, Bank of India, Oriental Bank of Commerce, Bank of Baroda and Andhra Bank gained upto 5% each.
The auto pack joined the party, with Hero Motocorp, M&M,, Tata Motors, Bajaj Auto and Maruti Suzuki gaining 1-3% each.
Select realty stocks also advanced on rate cut hopes, with Godrej Properties, Phoenix Mills and Sobha Limited gaining upto 6% each. L&T strengthened by 0.6% at Rs 1,787 ahead of its Q1 results scheduled later this evening.
On the other hand, BHEL, NTPC, Tata Steel and Cipla bucked the strong upmove.
The oil space also had a subdued session, with IOC, HPCL and BPCL losing 1-2% each. Index heavyweight RIL however ended flat.
