Mumbai: Benchmark stock indices Sensex and Nifty saw their best day in over three months on Monday, buoyed by the government move to withdraw additional surcharge on foreign investors and initiate measures to revive the economy.
The BSE gauge Sensex settled with a gain of 2.16 per cent or 792.96 points; while the NSE Nifty ended 2.11 per cent or 228.50 points higher.
Indian equities during the second half of the trading session also got a boost from the news that the US and China will soon resume trade talks despite many failed negotiations in recent months.
However, Asian markets closed with significant losses as investor worries grew over the ever-lasting US-China trade war, though sentiment revived in other markets, including India and the Europe, after the news broke out about a possible resumption of talks between the two major economies.
Riding on a wave of economic stimulus optimism, the 30-share Sensex opened over 663 points higher, but global volatility wiped out its gains as the session progressed. It swung 1,052 points during the day before settling at 37,494.12. The index, however, made a roaring comeback in the later half tracking news about US-China trade talks resumption.
Similarly, the broader NSE Nifty reclaimed the 11,000-level. During the day, it climbed a peak of 11,070.30 and touched a low of 10,756.55. It finally closed at 11,057.85.
Both benchmarks Sensex and Nifty have logged their best single-day gains in over three months, since the return of the Narendra Modi government for a second term.
Finance Minister Nirmala Sitharaman on Friday announced a raft of relief measures, including the rollback of enhanced super-rich tax on foreign and domestic equity investors, for the ailing economy.
She also announced exemption of startups from 'angel tax', a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore to public sector banks.
To bolster consumption, the government also said that banks have decided to cut interest rates, a move that would lead to lower EMIs for home, auto and other loans.
Yes Bank topped the gainers' list on the Sensex. It was followed by HDFC, Bajaj Finance, HDFC Bank, ICICI Bank, L&T, SBI, Axis Bank and Kotak Bank -- rallying up to 5.24 per cent.
On the other hand, Tata Steel, Sun Pharma, Hero MotoCorp, Vedanta, RIL, Tata Motors, Maruti Suzuki and Bajaj Auto fell up to 2.01 per cent.
Sectorally, BSE finance, realty, bankex, capital goods, industrials, FMCG and power index rallied up to 3.86 per cent.
While BSE metal index fell 1.12 per cent.
Broader BSE midcap and smallcap indices rose up to 1.65 per cent. Meanwhile, the Indian rupee depreciated 36 paise to 72.02 against the US dollar.
Brent crude futures, the global oil benchmark, rose 0.92 per cent to USD 59.34 per barrel.
"Indian markets opened higher following policy stimulus announcement by Finance Minister on Friday with a raft of measures," said Narendra Solanki, Head Fundamental Research (Investment Services) - AVP Equity Research, Anand Rathi Shares & Stock Brokers.
"Domestic markets recovered from the day's low in afternoon session as news of China's willingness to negotiate on US-China trade raised hopes of traders with added to the already positive domestic sentiments," Solanki said.
In Asia, Shanghai Composite Index, Hang Seng, Kospi and Nikkei ended significantly lower.
Equities in Europe were trading a tad higher in their respective early sessions.