Sensex soars 451.32 points to end at nearly two-week high of 20,850.74

Mumbai: The Sensex and the Nifty rose more than 2 per cent on Monday, to mark their biggest single-day gain in a month, tracking gains in other Asian markets, cheered by the prospect of extended stimulus in the United States and real economic reform in China.

World shares hit a near six-year high on Monday, boosted by signs of ambitious economic reform in China and after Janet Yellen, expected to be the next Federal Reserve chief, sounded in no rush to scale back stimulus.

Traders say liquidity would keep sceptics and economic worries aside for the time being. UBS downgraded India to "neutral" while upgrading China to "overweight", saying Plenum reforms will likely cause China to outperform Asia ex-Japan.

Overseas institutional investors are heading towards their third straight month of buying in Indian cash shares, totalling more than $5 billion since August, exchange and regulatory data shows.

"Earnings season had been more of good than bad. We are looking to accumulate good stocks at lower levels as liquidity and global sentiment remains good," said .

The Sensex rose 2.21 per cent, or 451.32 points, to end at 20,850.74, marking its biggest single-day gain since October 18.

The Nifty rose 2.19 per cent, or 132.85 points, to end at 6,189, closing within 11 points of psychologically important 6,200 level.

Among blue-chip shares, Larsen and Toubro (LART.NS) rose 4.1 per cent while Reliance Industries (RELI.NS) ended 2.7 per cent higher, on improving global risk appetite.

Shares in cigarette maker ITC (ITC.NS) surged 3.7 per cent on unwinding of short positions in its November futures contracts, dealers said.

Bank stocks gained with bond yields on watch ahead of the Reserve Bank of India's 80 billion rupees bond purchases later in the day.

HDFC Bank (HDBK.NS) rose 4.1 per cent while ICICI Bank (ICBK.NS) gained 2.1 per cent.

Among state-owned banks, State Bank of India e 2.6 per cent while Bank of India (BOI.NS) surged 7.9 per cent.

Tata Steel (TISC.NS) shares rose 3.1 per cent, adding to Thursday's 4.9 per cent gain after the company's second-quarter profit beat expectations, helped by a rise in prices and market share at home.

However, among stocks that fell, Coal India (COAL.NS) shares fell 1.4 per cent, adding to Thursday's 3.7 per cent fall after its September quarter profit fell marginally to 30.52 billion rupees, lagging some analysts expectations.