Snapping a two-day losing streak, Dalal Street scripted a handsome rally on Tuesday with key benchmarks advancing by over 1 per cent as traders indulged in bargain buying in beaten down stocks after a sharp run of recent losses.
A sharp rebound in stocks in China coupled with a recovery in the rupee from a two-year low, against the greenback also bolstered domestic sentiment.
The 30-share BSE SENSEX closed at 25,317.87, up by 424.06 points or by 1.7 per cent and the NSE Nifty ended at 7,688.25, up by 129.45 points or by 1.71 per cent.
The BSE Sensex touched intraday high of 25,411 and intraday low of 24,833.54. The NSE Nifty touched intraday high of 7,720.9 and intraday low of 7,539.5.
Meanwhile, hopes that India may ride out the ongoing global financial market turmoil supported domestic sentiment as Prime Minister Narendra Modi vowed to push through the GST reform that has been hit by political roadblocks while stressing on the need for more steps to ease the business environment in the country, a sign that the government will fast forward reforms to boost growth in Asia"s third biggest economy.
Modi also urged India Inc. to step up investments with many analysts suggesting that a slowdown in China could be a blessing in disguise for India, another Asian economic powerhouse.
The top gainers of the BSE Sensex pack were GAIL (India) Ltd. (Rs. 295.05,+6.48 per cent), Tata Steel Ltd. (Rs. 228.80,+5.97 per cent ), Bharat Heavy Electricals Ltd. (Rs. 212.20,+5.60 per cent), Axis Bank Ltd. (Rs. 473.65,+5.13 per cent), ICICI Bank Ltd. (Rs. 261.10,+4.75 per cent), among others.
Banking stocks stole the show, with the sector advancing by over 3.6 per cent amidst speculation that the RBI could dilute its proposed guidelines on base rates with lenders supposedly unhappy with a shift to the marginal cost-of-funds-based approaching for pricing loans that could hit net interest margins, especially in times of rising NPAs.
The Market breadth, indicating the overall health of the market, was strong. On BSE out of total shares traded 2753, shares advanced were 1475 while 1160 shares declined and 118 were unchanged.
Most Asian markets advanced with China"s Shanghai Composite spiking nearly 3 per cent as speculation that state-backed funds purchased shares amidst a weakening economy, bolstered sentiment.
China"s overseas shipments slid for a second month on the trot, declining by 6.1 per cent in August 2015 from the same month a year ago, in yuan terms, while imports plunged by 14.3 per cent, a sign that the country"s economic slowdown is deepening.
Hang Seng surged over 3 per cent but Japan"s Nikkei plunged more than 2 per cent even as data showed a lower than estimated contraction in the country's economy in the second quarter.