Mumbai, Oct. 10: The draft telecom policy provided a happy ending to the stock markets that had opened firm on positive cues from the overseas markets. The BSE Sensex gained 325 points to close at 16557.23 on across-the-board buying, led by index heavyweights RIL and Infosys.
The Sensex opened with a small gain at 16207.07 as fears of euro zone debt troubles receded with Germany and France agreeing to support European banks. It then hit an intra-day high of 16595.93 after the telecom policy was announced, and later closed at 16557.23, a gain of 2 per cent.
The 50-issue Nifty of the National Stock Exchange also spurted 91.55 points, or 1.87 per cent, to 4979.60.
While realty, consumer durables, auto and banking segments saw good buying, telecom companies gained up to 3 per cent on the BSE after the government unveiled the new policy that will help users avail themselves of free roaming services across the country and inter-circle mobile number portability.
Shares of Bharti Airtel, the countrys largest private telecom company, closed with a 2.38 per cent gain at Rs 363.25 on the BSE, recouping from its early losses.
Idea Cellular settled at Rs 92.40, up 2.22 per cent, while Reliance Communications rose 1.72 per cent to Rs 74.05.
Surge in the stocks was a knee-jerk reaction to the draft telecom policy. But until and unless there is clarity on the 2G issue, investors will refrain from any long-term investment plan in telecom scrips, CNI Research CMD Kishore P. Ostwal said.
Cable stocks such as Den Networks, Hathway Cable & Datacom and Dish TV India, too, settled with gains of 3.34 per cent, 2.38 per cent and 1.14 per cent, respectively.
The draft policy aims at converging mobile telephony, multimedia and broadcast services to offer a superior experience to customers.
Besides the telecom policy, market circles attributed the strong close to positive openings in Europe.
Overall, 25 of the 30 Sensex scrips ended in the green. All the 13 sectoral indices, except healthcare, closed with gains.
Among the heavyweights, RIL gained 3.30 per cent and Infosys rose nearly 3.40 per cent ahead of its quarterly results on Wednesday. The Bangalore-based IT company is expected to post good numbers for the second quarter of the current fiscal.
The momentum was seen across the equity markets as France and Germany jointly decided to come out with recapitalisation of European plans at the end of month. Corporate earnings will be the focus for the month. This will provide further direction for the market, Shrikant Chouhan, head of technical research at Kotak Securities said.
Globally, key indices in Singapore and South Korea closed higher. In Europe, the CAC, the DAX and the FTSE rose between 1.7 per cent and 3 per cent.