Keeping aside Tuesday’s disappointing factory output numbers, benchmark indices showed a strong performance on

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Wednesday after the US Federal Reserve in its meeting overnight signalled that it is ready to launch its second round of quantitative easing to lift the unfit US economy.

The BSE Sensex zoomed 484.54 points, or 2.40 per cent, to close at 20,687.88, its highest closing since January 14, 2008. This was also Sensex’s biggest jump since July 17, 2009. The 30-pack index is close to its all-time closing high of 20,873.33. Nifty surged 143 points, or 2.35 per cent, to 6,233.90.

There was brisk buying on large-cap counters as BSE small-cap and BSE mid-cap indices gained just 1.06 per cent and 0.99 per cent, respectively.

“The US Federal Reserve’s announcement to support the economy was already anticipated. In fact in its previous meeting, the Fed had given an assurance to step in if the economy needs help. Wednesday’s runup can be attributed partly to US cues and buying in large-caps,” said head of research at ICICI Securities, Pankaj Pandey.

IT stocks such as TCS, Wipro, HCL Tech and Infosys advanced 4.64 per cent, 4.48 per cent, 3.47 per cent and 2.48 per cent, respectively.

Pandey said the IT sector is expected to clock 5 to 7 per cent volume growth in the September quarter. Positive cues from the US and expectation of healthy results from Infosys on Friday lifted the IT counter, he said. Good earnings forecast from Intel also helped sentiments.

“Buying was seen all over the space. Nifty broke above the 6,200 mark once again and managed to close above it. Strong breadth is seen in the market, which is expected to continue on Thursday as well,” head of research at Geojit BNP Paribas, Alex Mathews, said.

Among the stocks that generated news, State Bank of Bikaner and Jaipur climbed 5.74 per cent to Rs 756.15 after the lender said its board would consider a rights issue on October 18.

Apollo Hospitals jumped 10.27 per cent to Rs 572.45 on reports the company would raise capital by the middle of next year through the debt route.

JSW Steel gained 1.64 per cent to Rs 1,346.75 on reports the company is considering putting its overseas coal and iron ore assets into a unit for a share sale to fund expansion.

MTNL rose 1.75 per cent to Rs 69.20 after the company’s American depository receipts (ADRs) surged 3.46 per cent to $2.99 on NYSE overnight.

SBI, Dr Reddy’s Lab and Tata Motors were among the frontline stocks which reached their all-time highs on Wednesday.

“Our top picks from frontline stocks include Infosys, Reliance, Bhel, Tata Motors, HDFC Bank and Tata Steel,” Ambit Capital research analyst Murali Krishnan said in a note.