The Sensex at the Bombay Stock Exchange extended the gains made on Friday,rising further by 304 points or 1.8 per cent in anticipation of a rate cut by the Reserve Bank of India. The benchmark index closed the day at 17,143.7 with gains over last two trading sessions extending to 3 per cent.
With the biggest intraday gain in a month,the broader Nifty at the National Stock Exchange rose by 100 points to close the day at 5,199.8.
The day also witnessed positive inflows from the foreign institutional investors. While FIIs invested a net of Rs 642 crore on Friday,data availbale at NSE showed they invested a net of Rs 928 crore on Monday.
Experts say that the market is optimistic about several events,domestic and globally,that are lined for the week.
The Fed and ECB have their meetings on August 1 and 2,respectively and there are expectations that ECB may announce some strong measures to contain the euro zone crisis. Closer home,the monetary policy meeting is scheduled tomorrow, said Sanjeev Zarbade,VP research,Kotak Securities.
All sectoral indices at the BSE rose during the day but the market was driven largely by interest rate sensitive sectors. The power index rose 3.6 per cent and the real estate index was up 3.1 per cent. Capital goods,banking and consumer durables rose between 2.5 and 3 per cent during the day.
Among the sensex companies,the State bank of Indian emerged as the biggest gainer as its share price rose by 4.6 per cent during the day,while ICICI Bank was up 3.9 per cent.
Tata Motors and Tata Power rose by 4.2 per cent and 4.1 per cent respectively.
Markets extended their gains on short covering as Nifty crossed its major resistance at 5150. Interest rate sensitive realty stocks were up ahead of the RBIs first quarter review policy on 31 July, said Alex mathews,research head at Geojit BNP Paribas Financial Services.