Sensex closes 337 points higher on ECB bond buying plan

A benchmark index of Indian equities markets closed 337 points higher Friday in a global rally after the European Central Bank (ECB) unveiled a new bond buying programme.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,575.79 points, closed 17,683.73 points, 1.95 percent or 337.46 points up from its previous day’s close at 17,346.27 points. This is the biggest single day gain in two months.

The Sensex touched a high of 17,701.20 points and a low of 17,575.79 points in intra-day trade.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange closed 1.98 percent up at 5,342.10 points.

Overnight, US stocks had hit a four-and-a-half-year high after the ECB said there will be no limits to the purchases of government bonds with maturities of one to three years.

The programme is aimed at keeping the short-term borrowing rates of countries like Italy and Spain at manageable levels, giving them time to enact debt reduction measures and economic reforms.

“ECB bonds buying sparked global rally which allowed Indian market open up,” said Kishor P. Ostwal, chairman and managing director, CNI Research Ltd.

Asian stock markets rallied during the day. Japan’s Nikkei closed 2.20 percent up while Shanghai’s composite index closed 3.70 percent higher. Hong Kong’s Hang Seng closed up 3.09 percent.

Among the European markets, France’s CAC was up 1.18 percent and so was Germany’s DAX, up by 0.89 percent. Britain’s FTSE 100 was trading 0.22 percent higher at closing bell here.

On the sectoral front, the BSE capital goods index was up 281.70 points. And so were the realty index, up 40.63 points and the metal index, up 252.32 points.

All the 30 Sensex scrips were gained. Tata Steel was the biggest gainer, closing 5.72 percent higher at Rs.370.70.

The other major gainers were ICICI Bank, up 4.68 percent at Rs.937.85; Tata Motors, up 4.40 percent at Rs.243.30; Larsen and Toubro, up 3.86 percent at Rs.1,367.90; and Hindalco Inds, up 3.39 percent at Rs.105.15.