Thursday, the Indian market climbed to close at its best in five months on the back of gains on Wall Street overnight and a broad rally across the Asia-Pacific region and Europe after encouraging US factory and home sales data fueled hopes the worst was behind for the world's largest economy.

Buying by foreign funds and reports that the ministry of corporate affairs has accepted a proposal to defer mandatory provisioning of forex losses under the accounting standard AS-11 until 2011 also supported the market.

While most marketmen expect the market to have an upward bias in the coming months, a section of analysts advised caution because of the uncertainty associated with the upcoming general elections. Apprehensions about the quality of corporate earnings for the March quarter may also lead to profit- taking.

Meanwhile, after declining for eight consecutive weeks, India's annual rate of inflation for the week ended March 21 rose marginally to 0.31 percent from 0.27 percent in the previous week, data released by the commerce and industry ministry showed.

The BSE Sensex opened higher at 10,107 and rose sharply to a high of 10,432 before paring some of its gains to finish at 10,349, up 447 points or 4.51% over the previous close. Likewise, the S&P CNX Nifty rose 151 points or 4.92% to 3,211.

On the BSE, the market breadth was extremely positive, with advancers outnumbering decliners by 2014 to 535. The small-cap index moved up 2.91%, the mid-cap index rose 3.77% and the broad-based BSE 500 index rallied 4.25%.

Investors aggressively bought shares across the board. While realty, metal and oil/gas stocks led the rally, stocks in the healthcare and auto sectors closed with modest gains.

DLF, Jaiprakash Associates, Tata Motors, Reliance Communication, ONGC, Wipro, Tata Steel, Hindalco, Larsen & Toubro and State Bank of India were the top gainers. Twenty-nine out of 30 Sensex stocks ended firm, but defensive stock Hindustan Lever ended down 2.49%.

Realty stocks led the rally on heavy buying at lower levels. Among the major gainers in this space, Mahindra Life and DLF surged up over 15% each, HDIL climbed 13%, India Bulls Real Estate and Penland soared nearly 9% each, Sobha Developers rallied 3.92% and Parsvnath gained 2.70%.

Metal stocks jumped as primary metal prices indicated some recovery in the past few trading sessions. JSW Steel (up 21.81%), Steel Authority of India (up 9.96%), Tata Steel (up 7.15%), Hindalco Industries (up 7.03%), National Aluminum (up 6.51%) and Sterlite Industries (up 5.93%) were some of the prominent gainers.

Bharat Heavy Electricals rallied 4.06% after the company reported a 6% year-over-year rise in its provisional profit after tax for the 12 months ended March 2009. Bhagyanagar India surged up 16.62% after the company proposed to buy back its own shares.

Reliance Industries jumped 5.26% after it began pumping natural gas from its eastern offshore Krishna Godavari basin fields. Tata Motors jumped nearly 13% after its domestic vehicle sales for March showed a 24% rise from a month ago. Maruti Suzuki ended with a modest 0.24% gain after its total sales during March grew 21.87% to 85,669 units from 70,296 units in the same month last year.

Telecom stocks closed firm despite reports that the government has ordered a special audit on the books of leading private telecom companies. Reliance Communication soared 9% and Bharti Airtel gained 3.80%, while Idea Cellular and Tata Teleservices rose around 3% each.

Mercator Lines advanced 5.31% after its Singapore unit agreed to buy a dry bulk carrier for approximately $24.2 million. The acquisition will be financed through a mix of debt and internal accruals and will take the unit's total fleet to 10 ships, the company said.

Larsen & Toubro jumped 6.65% after it bagged two orders totaling Rs1, 143 crore from Tata Steel for construction-related works. It has also bagged a Rs.1344 crore refinery order from MRPL, Mangalore.

Steel Strips Wheels jumped 10% after it reported a 5.42% rise in sales to 5.83 lakh units in March. Pidilite Industries advanced 4.12% after a total of 25 lakh shares changed hands in two block deals on the stock exchanges.

Bajaj Auto rose 1.56% even as its vehicle sales fell 13% in March compared to the same month last year. Piramal Healthcare recouped its early losses and ended up 4.15% after it has decided to shutdown its manufacturing facility in Huddersfield in United Kingdom

ICICI Bank topped the traded value with a turnover of Rs.329 crore followed by Reliance (Rs.284.25 crore), Reliance Infrastructure (Rs. 182 crore), Reliance Capital (Rs.176.40 crore) and SBI (Rs.160.65 crore).

Reliance Natural Resources topped the traded volume with trades of around two crore shares followed by Suzlon (1.95 crore), Unitech (1.45 crore), HDIL (1.15 crore) and Ispat Industries (1.10 crore).

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