Indian equities rallied smartly on global cues with the Bombay Stock Exchange (BSE) benchmark Sensex closing at 16,416.3 points, up 567.5 points, or 3.6% on Monday, as world stock markets staged a relief rally. They were buoyed by Federal Reserve chief Ben Bernanke's call on the US government to help spur growth in the world's largest economy.
The broadbased Nifty rose 171.8 points, or 3.6%, to 4,919.6.
Bernanke on Friday stopped short of signalling further action to boost the US recovery, but reiterated that the central bank was examining options and was prepared to act as needed. "Monetary policy must be responsive to changes in the economy and, in particular, to the outlook for growth and inflation."
Speculation is still strong about a possible government bond-buying programme by the Fed worth hundreds of billions of dollars, in an attempt to infuse liquidity and spur demand, similar to lat year's $600-billion bond-buying programme termed as quantitative easing.
Bernanke made clear that the focus was still on spurring a stronger recovery, but he did not provide any fresh details on steps the Fed could take.
Asian markets on Monday cheered Bernanker's remarks and closed in the black.
The Japanese Nikkei closed 0.6% up at 8,851.4, while Hong Kong's Hang Seng rose 1.44.0% higher at 19,865.1.
Major European stock market indices including Germany's DAX and France's CAC-40 opened in the black following Bernanke's speech.
In India, finance minister Pranab Mukherjee said adverse global economic developments offered new opportunities to India. "If India can continue to grow and acquire economic strength, we could be a source of stability for the world economy and provide safe havens for restless global capital.""We have to be alert to shape real-time policy responses, reform systems, improve the regulatory framework of our institutions and make the most of the opportunities coming our way," he said.