China’s massive $586-billion economic stimulus plan triggered a solid rally in stock markets across Asia, including India, on Monday. The BSE Sensex vaulted by 572 points, or 5.74 per cent, to 10,536.16 as investors bought across-the-board with the Chinese move raising hopes authorities elsewhere would follow suit to stave off a sharp economic downturn.

With this gain, the benchmark Sensex has risen 37 per cent from a three-year low hit on October 27. However, it is still down 48 per cent in 2008 to be one of the worst performers in Asia this year.

The battered metal sector rose on expectations that demand from China will rise following the rescue package introduced by the Chineese government and closed with a gain of 10.92 per cent.

Investors are now pinning hopes on the G-20 economic summit this weekend for more rescue packages.

US shares, which opened strongly following Friday’s strong finish, were down. The Dow Jones index of leading shares fell 0.4 per cent. The losses on Wall Street prompted some selling in Europe before the close after earlier strong gains. The FTSE 100 ended up only 0.9 per cent,while Germany’s DAX was up 1.8 per cent. France’s CAC-40 rose 1.1 per cent. Earlier enthusiasm for the Chinese package helped Tokyo’s Nikkei 225 stock average surge 5.8 per cent, while Hong Kong’s Hang Seng Index gained 3.5 percent. Shanghai Composite Index soared 7.3 per cent, while markets in Australia, Singapore and South Korea joined the region’s advance.

The rupee strengthened on Monday as solid gains in the domestic stock market renewed hopes for fresh capital inflows. The rupee closed at 47.35/37 per dollar, 0.6 per cent stronger than Friday’s close of 47.65/66. The rupee has recovered 6.2 per cent from its record low of 50.29 hit in late October, but is still down 16.8 per cent on the year.