Mumbai, Aug 4 : Domestic markets today surged the most in nearly two weeks with Sensex surging 242 points and the Nifty rising 81 points led by gains in rate-sensitive shares ahead of RBI policy meet while persisting weakness in the rupee boosted IT stocks. Easing crude oil prices on receding geo-political worries and positive European markets on reports that Portuguese central bank is set to financially rescue a crisis-hit lender, also helped Indian markets snap a two-session losing trend.

The BSE 30-share Sensex resumed strong in line with firm Asian cues and traded mostly in positive before settling at 25,723.16, a rise of 242.32 points or 0.95 per cent — its biggest gain since July 22, 2014 (310.63 points). The Sensex had lost 606.38 points, or 2.33 per cent in the previous two trading days i.E, August 1 and July 31. Similarly, the 50-scrip NSE Nifty bounced back by 81.05 points, or 1.07 per cent, to end at 7,683.65. It had shed about 189 points in previous two days. Today’s 81.05-point gain is also Nifty’s best since July 22 (83.65 points).

Expectations that the Reserve Bank of India (RBI) in its monetary policy review tomorrow will give some relief supported the bullish market sentiment, brokers said. However, consensus is of the view that RBI will not cut rates tomorrow. Interest-sensitive stocks such as SBI, ICICI Bank, and Axis Bank gained about 1 per cent ahead of RBI policy outcome. Consumer durables, realty, capital goods and auto shares were in good demand. IT shares were in the limelight after steep fall in the rupee value last week. Infosys was the top gainer from the Sensex pack today with a rise of 3.66 per cent. Wipro rose by 2.42 per cent and TCS by 0.42 per cent.

“IT, banking and auto stocks drove benchmark indices higher ahead of RBI monetary policy tomorrow. Portugal agreed to spend 4.9 billion euros to rescue Banco Espirito Santo, its largest listed bank. This provided some support to European markets,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities. Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 1,072.96 crore last Friday as per provisional data from the stock exchanges.