The domestic market staged a strong bounce back on the back of firm global cues and short covering in the latter half of the trading session, taking the Sensex higher by 600 points and the Nifty up nearly two per cent to reclaim the 10,400 range.
After falling by 10 per cent from the all-time high levels over the past month, the rally in the market has come as a big relief to the investors.
Almost all the sectoral indices participated in the surprise up-move that was led by strong buying in index heavyweights ITC, HDFC and Reliance Industries.
The rally comes in the wake of a bounce back in global equity as concerns of trade-war receded, with the market focus shifting to the strong US jobs report released over the weekend.
Trading for the week began on a firm note as the key benchmark indices saw a gap-up opening triggered by positive Asian stocks and the indices extended gains in morning trade.
The Sensex surged 610.80 points, or 1.83 per cent, to settle at 33,917.94, while the Nifty advanced 194.55 points, or 1.9 per cent, to settle at 10,421.40, the highest closing for both indices since March 1, 2018.
A relief rally swept across the global markets on Monday after the latest US jobs report managed to impress investors with its strength while also easing fears of inflation and faster rate hikes, a neat feat that whetted risk appetites globally.
MSCI’s index of Asia-Pacific shares outside Japan climbed 1.3 per cent while Japan’s Nikkei surged 1.6 per cent.
"Firm global cues and expectation of ease in domestic inflation to 4.74 per cent excited investors to utilise the bargain opportunity. The fear of global trade war is somewhat factored in the market while the increase in US payroll data suggest stability in the economy, which boosted the global trade. Investors are positive on blue chips on expectation of faster recovery, however, mid- and small-caps witnessed reluctance due to high valuation,” said Vinod Nair, head of research, Geojit Financial Services.