Mumbai: The Bombay Stock Exchange rose 4.7 percent on Wednesday, posting its biggest percentage gain in three weeks, as worries over US credit-related losses eased boosting world markets.
Reliance Industries, the top weighted stock, led the gains rallying more than 7 percent, while improved sentiment for financials helped ICICI Bank and HDFC Bank surge nearly 9 percent and 11 percent, respectively.
The benchmark 30-share index ended up 4.69 percent, or 893.58 points, at 19,929.06, after rising as high as 19,987.71. It was the biggest percentage rise since a 4.99 percent jump on Oct. 23, and the index is only 1.5 percent away from a record high of 20,238.16 hit on Oct. 30.
The broader NSE index gained 4.26 percent to a record close of 5,937.90.
Traders said they would be looking to foreign portfolio inflows to guage whether the rally could be sustained. The BSE index had fallen for six sessions in a row to Monday in its longest stretch of losses in almost five years as foreign funds trimmed their exposure as U.S. credit troubles rattled global equity markets, but rebounded 1.6 percent on Tuesday.
"Liquidity has been poor in last week or so. So I would not give it the same level of aggression," said Abhay Aima, head of private banking at HDFC Bank. A surge in inflows after the U.S. rate cut in September had powered the BSE index to a series of record highs.
Foreign investors have sold about $600 million in November, trimming their exposure to Indian equities to $16.7 billion in 2007. "I would be cautious. If liquidity keeps squeezing, I think it would be difficult to hold such levels," Aima said.
But K K Mital, chief executive of Escorts Mutual Fund, said the slowdown in inflows was a blip as India's robust economy that is expanding 9 percent a year and earnings growth of more than 22 percent would attract investors.
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