Mumbai: Stocks sprinted for the third straight session as the Sensex Thursday gained over 485 points to 26,367 -- nearly a 7-month high -- on rebound in crude oil prices and expectations of further economic reforms in the third year of the Modi government.
Improvement in March quarter numbers on the last leg of the earnings season showed that the economy is gaining traction, which buoyed sentiment further.
Oil broke past the USD 50 per barrel for the first time this year after data showed US crude inventory declined, which kept Asian markets too in good spirits.
Traders said covering-up of short positions on expiry of May month series of derivative contracts at the end of session helped.
Forecast of a better-than-expected monsoon by private agency Skymet did its bit. It has predicted a rainfall of 109 percent of long period average, up from its earlier forecast of 105 percent.
An appreciating rupee against the US dollar provided more ammo to investors.
After a strong performance by the BJP in recently-held Assam assembly elections, expectations have grown that the growing political comfort for the ruling party would help expedite various economic reforms by the Modi government in its third year.
In spite of all this, worrylines remained, given uncertainties over US tightening its monetary policy earlier than expected and a slowing Chinese growth.
The Sensex opened strong and surged further before settling at 26,366.68, a solid gain of 485.51 points, or 1.88 percent. The barometer ended at 26,552.92 on November 4 last year.
The index had gained 650.85 points in the previous two sessions on strong reform measures from the Centre and firm global cues.
The 50-share NSE Nifty ended at 8,069.65, a hefty gain of 134.75 points, or 1.70 percent.
Globally, Asian markets ended higher following an overnight surge on the Wall Street and a higher opening in Europe after crude oil topped USD 50 a barrel. The G7 summit in Japan to take stock of the global economy also infused a sense of confidence, traders said.
As many as 22 scrips out of 30-share Sensex pack ended higher.
L&T emerged as the top gainer by rising 14 percent after the company reported an 18.5 percent jump in consolidated net profit at Rs 2,453.6 crore for the March quarter.
Other major gainers were SBI (4.91 percent), BHEL (4.73 percent), Axis bank (3.35 percent) and ONGC (3.09 percent).
Capital goods rose 8.78 percent, followed by banking 2.22 percent, realty 1.82 percent and power 1.51 percent.
Mid-cap and small-cap too rose 1 percent and 0.86 percent, respectively, on increased buying by retail investors.
Key indices in France, Germany and the UK were higher by up to 0.28 percent.
Shares in China, Hong Kong, Japan and Singapore finished higher by up to 0.26 percent.
Meanwhile, foreign portfolio investors (FPIs) net bought shares worth Rs 495.08 crore during Wednesday's trading session, as per provisional data.
The market breadth remained positive as 1,411 shares ended higher, 1,141 closed lower while 195 ruled steady.
The total turnover fell to Rs 2,928.58 crore, from Rs 2,323.39 crore yesterday.