With the central bank's rate cut hopes and good fiscal deficit numbers, the stock market boosted on value-buying by blue-chip stocks and the benchmark BSE Sensex rose for the second straight day on Monday by surging 363 points to close at over three-week high of 27,687.30.
Meanwhile, the rupee snapped its three-day winning spree against the American currency by falling 21 paise to 63.72 on fresh dollar demand from banks and importers in view of a firm dollar in the overseas market.
The rupee resumed higher at 63.45 per dollar as against the last weekend's level of 63.51 at the Interbank Foreign Exchange (Forex) Market on initial selling of dollars by some banks and importers.
The Government on Sunday reported fiscal deficit at 4.0 per cent of GDP, while continuing rate cut hopes amid forecast of timely monsoon helped the market to maintain an upward trend.
Shares of fuel retailers, HPCl, BPCl and IOC, surging up to 4 per cent after petrol price was hiked over the weekend contributed to 30-share barometer's gains.
Bettering its own financial targets, the Government on Sunday said that it has contained the fiscal deficit at 4 per cent of GDP for 2014-15 at Rs5,01,880 crore.
"The sentiments were on optimistic note in response to the Government statement that it has contained the fiscal deficit at 4 percent of GDP for 2014-15, bettering its own financial targets," said Jayant Manglik, President-retail distribution, at Religare Securities.
The Sensex began on a strong footing at 27,416.97 and continued to rise to hit a high of 27,725.97 before settling 363.30 points or 1.33 per cent higher at 27,687.30. This is the best closing since April 23 when Sensex had closed at 27,735.02. The gauge has now gained 481.24 points in two sessions. The broad-based NSE Nifty regained the 8,300-level by surging 111.30 points or 1.35 per cent to close at 8,373.65. It shuttled between 8384.60 and 8,271.95 intra-day.
Equity brokers said sentiments got bolstered after a forecast of a timely monsoon and expectations of a rate cut by the RBI at its policy meet early next month following cooling inflation and slowing industrial growth.