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Buying spree was visible in largecaps which overshadowed gains seen on smallcap and midcap indices, which were in the positive terrain throughout the session.
After remaining in the negative territory for most of the session, a spike in the BSEbenchmark Sensex in late trade took most equity investors by surprise.
The buying spree was visible largely in largecap stocks. The rally in largecaps in fact overshadowed gains seen on smallcap and midcap indices, which were in the positive terrain throughout the session.
The BSE Sensex climbed 348.32 points, or 1.41 per cent, to settle the day at 25,022.16. NSE barometer Nifty50 surged 1.54 per cent to settle at 7,671.40.
Here's a look at some of the factors that lifted the mood on the Dalal Street:
BoJ hints at further stimulus: The initial signs of recovery in the index were seen after Bank of Japan Governor Haruhiko Kuroda in a speech said the Japanese central bank would be closely tracking the unstable moves in global markets that could affect the country's economy and prices. Kuroda said he would not hesitate to go for additional easing, if needed, to achieve its inflation target.
The ratio of Japanese households, who expect prices to rise a year from now on stood at 75.7 per cent in March, a quarterly survey by BOJ showed. This is the lowest level of household suggesting this since March 2013.
European stocks rally on Italian banking plan:
European stock, as suggested by Euro Stoxx 50, rose 1 per cent in trade at the time the domestic market closed for the day. Equity indices across the region climbed amid reports that Italy's central bank officials were all set to meet the executives of major banks, including Intesa Sanpaolo and UniCredit, later in the day to hold discussions on creating a fund that would buy bank shares and help them tackle non-performing loans. Concerns over non-performing assets are not restricted to India. Banks the world over are facing rising NPA problems and are influencing sentiments in equity markets globally.
Govt expects good southwest monsoon: The market sentiment also got a boost after Agriculture Secretary Shobhana K Patnaik said the monsoon this year is expected to be normal. The government has directed states to chalk out plans to boost crop acreage and production in kharif season starting June.
Addressing a national conference to launch kharif campaign for 2016-17, Patnaik said: "The El Nino condition is declining. It is expected that La Nina condition will take over and will perhaps favour a good monsoon this year." The monsoon has been below normal in the past two years.
"India has had two successive poor monsoons as well as unseasonal rains during the rabi harvest in CY15 and in CY16 as well. This had not only hampered rabi output, but also resulted in lower income levels in the rural areas leading to reduced consumption," brokerage Prabhudas Lilladher said in a note.
Dow futures hint at positive start to US markets: The positive momentum in European markets had a spillover effect on Dow Jones futures, which were trading about half a per cent higher by the time the domestic market closed. Dow Jones futures for June delivery were trading at 17,561, up 0.44 per cent. S&P 500 futures were up by 0.43 per cent at 2,049.50.
Good earnings expectation: Kotak Institutional Equities believes Sensex companies may report a 5.7 per cent YoY growth and 7.8 per cent QoQ growth in net income for the March quarter. Various estimates available at the moment suggest that the result season would be good for India Inc on various parameters.
Crisil Research is expecting India Inc to report an Ebidta (earnings before interest, taxes, depreciation, and amortisation) growth of 7 per cent for the quarter. "That will mark the fastest growth in six quarters, driven by higher gross margins derived from lower commodity prices," it said.
Meanwhile, IT firms are expected to report decent quarterly earnings this time. Infosys is the first major largecap company to report earnings this year.
Source:- Economic Times

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