Mumbai, Sep 10 (IANS): key indices of Indian stock markets surged by almost three percent and the rupee showed strong recovery as concerns over tensions in Syria eased and the government indicated that trade deficit had narrowed in August.

The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE), which opened sharply higher at 19,448.39 points, was ruling at 19,784.69 at trading around noon, up 2.67 percent or 514.63 points from its previous close at 19,270.06 points.

The benchmark Sensex surged to a high of 19,827.15 points in the intra-day trade.

The Indian rupee soared to a two-week high of 64.17 against the dollar, a gain of 1.5 percent over Friday's close at 65.24 to the dollar.

The currency rose sharply a day after the government indicated that the trade deficit narrowed in August that will help in curbing current account deficit, a major reason for the recent sharp depreciation of the rupee.

Commerce Secretary S. R. Rao said Monday that merchandise exports posted double-digit growth in August, while imports were contained.

Commerce and Industry Minister Anand Sharma is scheduled to announce the official trade data later in the day.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) soared 2.71 percent or 154.20 points at 5,834.60 points.

There was strong buying support in capital goods, auto, FMCG and power stocks.

The BSE capital goods index surged 5.48 percent. Auto index soared 4.59 percent. FMCG index was up 3.4 percent and power index was ruling 3.09 percent higher.