Mumbai: Indian equity benchmarks closed at a two-month high on Friday as global markets rallied quite sharply after European leaders, on first day at European Summit, have agreed to take emergency action to bring down Italy's and Spain's spiraling borrowing costs.
Another reason for rally: Key benchmarks outperformed to global peers on hopes of some reforms or policy decision coming by in near term as Prime Minister Manmohan Singh took charge of Finance Ministry.
The BSE benchmark gained 439.22 points (biggest closing gains in the year 2012) or 2.59 per cent to close at 17,429.98 led by buying across sectors. Meanwhile, the NSE benchmark rose 129.75 points or 2.52 per cent to 5,278.90.
France's CAC and Germany's DAX jumped 2% each while Britain's FTSE went up 1.3 per cent. The Dow Jones futures climbed more than 1 per cent, indicating positive opening of US markets today. Asian markets closed 1-2 per cent higher.
European banks surged quite smartly as the 17 bloc nations agreed to create a single supervisory body for euro zone banks by the end of this year and to allow them to be recapitalized directly by the currency area's rescue fund without adding to government debt. Italy and Spain indices were up 3.5 per cent and 2.5 per cent, respectively.
Euro rose more than 1 per cent to 1.26 against the US dollar.
Back home, the Indian rupee appreciated by 82 paise or 1.45 per cent to 55.975 against the US dollar at 15:31 hours IST.
The BSE Capital Goods, Power, Bank and Metal indices were up around 3.5 per cent. Auto, Realty, FMCG, Healthcare and Oil & Gas gained 1.5-2.5 per cent.
Country's largest private sector lender ICICI Bank spiked 5 per cent while its rivals State Bank of India and HDFC Bank moved up 3 per cent each.
Engineering and construction major by sales Larsen & Toubro jumped 4 per cent while state-owned power equipment maker BHEL was up 5 per cent.
Private power and steel producer Jindal Steel topped the buying list, rising 8.4 per cent. Tata Power has been rising since Tuesday, which rose 6 per cent on Friday and more than 10 per cent this week.
Shares of ITC, Reliance Industries and ONGC advanced 2.5-3 per cent. Top software services exporters TCS and Infosys were up over 1 per cent.
Country's largest car maker Maruti Suzuki gained 4.6 per cent on upgrade by brokerages. Among metals stocks, Hindalco Industries, Tata Steel and Sterlite Industries rose 3-5 per cent.
However, Cairn India crashed 6 per cent after sources said its parent company Cairn Energy PLC sold more than 6 crore shares of Indian unit. BPCL fell 1 per cent as oil marketing companies reduced petrol price by Rs 2.46 a litre.
The BSE Midcap Index was up 1.6 per cent and Smallcap up 1.3 per cent. About two shares advanced for every share declining on the BSE.
In the second line shares, NCC, Lanco Infra and GMR Infra surged 7-13 per cent. Sintex Industries, Indiabulls Real, PFC, REC, TVS Motor, IFCI, Zee Entertainment, DCB and Adani Power gained 4-7 per cent.
However, OnMobile Global crashed 8% despite company denied reports of probe order against company's promoter and CEO Arvind Rao.
Manappuram Finance fell 2 per cent on profit booking for second consecutive session after rising more than 38 per cent in previous three sessions.
Commodities too witnessed buying interest due to rally in equities. Gold, silver and copper were up 1.5-2 per cent while Brent and NYMEX crude gained 2.5-3 per cent.
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