Indian benchmark indices rebounded sharply after a steep fall in the last six sessions, despite waning optimism over US-China trade meeting that will be held on October 10-11. Sensex and Nifty logged strong gains after six consecutive days of losses as investor sentiment got a booster dose after the government announced a 5 percent hike in dearness allowance.
Experts said the hike in dearness allowance will boost consumer demand as it implies more money in the hands of over a crore government employees.
The 30-share benchmark index closed trading at 38177.95 up by 645.97 points or by 1.72 % and then NSE Nifty was at 11313.3 up by 186.9 points or by 1.68 %.
Sensex touched intraday high of 38209.84 and intraday low of 37415.83 The NSE Nifty touched intraday high of 11321.6 and intraday low of 11090.15
Stable global cues and rupee's improved health also offered some support which propelled investors to embark on short- covering. The Indian currency erased all losses and rose up to 8 paise against the US dollar.
Asian markets ended mixed as hopes that the US and China could reach a truce this week faded after Donald Trump's administration introduced visa restrictions on Chinese officials and added more Chinese companies to a US trade blacklist.
US official said high-level trade talks would still take place on Thursday and Friday as planned, but Trump has said tariffs on Chinese imports will rise on October 15 if no progress is made in the negotiations.
Back home, the top gainers of the BSE Sensex pack were IndusInd Bank Ltd. (Rs. 1309.50,+5.45%), Bharti Airtel Ltd. (Rs. 359.25,+5.20%), ICICI Bank Ltd. (Rs. 436.60,+4.88%), State Bank of India (Rs. 260.90,+4.78%), Mahindra & Mahindra Ltd. (Rs. 576.10,+4.25%), among others.
The top losers of the BSE Sensex pack were YES Bank Ltd. (Rs. 43.20,-5.26%), Hero MotoCorp Ltd. (Rs. 2603.80,-2.65%), HCL Technologies Ltd. (Rs. 1050.90,-2.16%), ITC Ltd. (Rs. 247.10,-1.81%), Tata Consultancy Services Ltd. (Rs. 2020.65,-1.57%), among others.
Among the sectors, Bankex index was at 32537.43 up by 1152.06 points or by 3.67%. IndusInd Bank Ltd. (Rs. 1309.50,+5.45%), ICICI Bank Ltd. (Rs. 436.60,+4.88%), State Bank of India (Rs. 260.90,+4.78%), HDFC Bank Ltd. (Rs. 1228.50,+3.44%), Kotak Mahindra Bank Ltd. (Rs. 1608.30,+3.35%),.
On the flip side, IT index was at 15240.41 down by -141.15 points or by -0.92%. Tata Elxsi Ltd. (Rs. 637.80,-6.26%), Kellton Tech Solutions Ltd. (Rs. 19.00,-5.00%), Allsec Technologies Ltd. (Rs. 279.40,-3.66%), Majesco Ltd. (Rs. 432.00,-2.78%), Cigniti Technologies Ltd. (Rs. 314.00,-2.55%),.
The Market breadth, indicating the overall strength of the market, was weak. On BSE out of total shares traded 2919 , shares advanced were 1398 while 1319 shares declined and 202 were unchanged.