Sensex closes 684 pts, highest since 2010

[1]

 The sensex on Thursday rose 684.48 points to end at 20,647, led by gains in banking stocks after the US Fed stunned markets and decided not to taper its asset-buying programme.The surge in BSE sensex and the Nifty was led by gains in banking stocks.The broader Nifty rose as much as 4.1%, marking its highest level since May 22, 2013, while the benchmark BSE sensex rose as much as 3.9%, marking its highest level since November 11, 2010.The NSE bank index gained 7.2% on hopes that the RBI in its policy review on Friday, may ease some of emergency cash tightening steps it had initiated in mid-July.Among large-cap banks, ICICI Bank Ltd rose 6.5%, HDFC Bank Ltd was up 5.7% while the midcap Yes Bank Ltd surged 23.2%.The rupee on Thursday morning zoomed by 158 paise to trade at over one-month high of 61.80 against the dollar at the Interbank Foreign Exchange market on hopes of increased capital inflows after the US Federal Reserve's surprise decision to keep its stimulus programme intact.The rupee had settled just a paise lower at 63.38 against the dollar in yesterday's trade.On Wednesday, in a move that could prove to be a major relief to India, the US Federal Reserve said that it would continue buying bonds for $85 billion every month for now, surprising financial markets that were braced for a reduction in the central bank’s economic stimulus.Citing strains in the economy from tight fiscal policy and higher mortgage rates, the Fed decided against the tapering of asset purchases that investors had all but priced into stock and bond markets.However, the Fed’s decision to leave bond purchases unchanged could boost investor sentiment, strengthen the rupee and give elbow room to RBI governor Raghuram Rajan to manoeuvre RBI’s policy on Friday