NEW DELHI: The BSE Sensex provisionally ended 600 points higher at 16,448.91 led by gains in Reliance Industries Ltd (up 5.07%), Infosys (up 3.8%) and L&T (up 5.4%); while the 50-share Nifty index closed 4919.60 (provisionally), up 3.6%.
The Sensex, which lost nearly 650 points in the previous three trading sessions, bounced back with gains in BSE IT index (up 5.1%), BSE Banking index (up 4.3%) and BSE Realty index (up 4.79%).
Shares in NBFC's gained soon after RBI released the Usha Thorat committe report on non-banking finance companies. Shares in SREI Infrastructure Finance Limited (up 11.4%), Shriram Transport Finance (up 4.5%) and IFCI Ltd (up 14.1%).
Both gold and silver tumbled in the bullion market due to heavy selling by stockists on reduced offtake at existing higher levels, triggered by a weak trend in overseas markets.
Gold plunged by Rs 600 to Rs 27,490 per 10 grams, while silver lost Rs 1,800 to Rs 62,800 per kg.
Dealers said trading sentiment turned bearish after gold declined in the global markets as the US Federal Reserve Chairman Ben S Bernanke said growth will resume. It boosted speculation that the central bank may not add more stimulus, which eroded the metal's appeal as a safe haven.
Besides sluggish demand at prevailing high levels, investors were seen shifting their funds from bullion to rising equity, which also influenced the trading sentiment, market analysts said.
Gold in global markets, which normally sets the price trend on the domestic front, traded 0.9 per cent lower at USD 1,812 an ounce.
Meanwhile, European shares gained, tracking a late rally in Wall Street on Friday, after US Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the troubled economy at the US central bank's September meeting.
Greek banks soared 20 per cent on an expected merger between Greece's second- and third-largest lenders, Eurobank and Alpha Bank, Germany's DAX and France's CAC40 rose 1.3 and 1.2 per cent respectively.
Heavyweight banks to gain included Credit Suisse , Societe Generale and UBS , up between 1.7 and 3 per cent.
"It's a bit more optimism about the economy that is driving the market. Bernanke said the economic recovery would accelerate and that the central bank would prop up growth if needed. So it's a win-win," a senior sales trader at a European investment bank said.
At 0834 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 per cent at 925.19 points, after falling 0.7 per cent on Friday. The index has lost more than 17 per cent so far in 2011.
Trading volume was set to be light, with London markets closed for a holiday.
US stocks initially fell on Friday after Bernanke stopped short of describing detailed plans to strengthen the ailing economy. But the market turned higher, led by technology shares, as investors concluded the Fed was leaving the door open for action even though many traders believe it has limited power to pull the economy out of a rut.
Some strategists said low valuations were also important in attracting investors back into the markets.
