Mumbai: Market made a stunning comeback as the Sensex Thursday rallied 457 points - its biggest one-day gain in over six weeks - to close at almost one-month high of 26,694, in line with ECB-induced global rally amid a stronger rupee. Nifty too topped the psychological 8,200 mark.
Investors got their confidence level back, thanks to higher opening in Europe on expectations that the European Central Bank (ECB) at a policy meeting later in the day would extend its monetary stimulus, brokers said.
The rupee, at 67.32 notched up gains against the dollar (intra-day), which fueled buying.
The 30-share barometer stayed in the green throughout to hit the day's high of 26,733.87 following all-round buying. It ended at 26,694.28, up 457.41 points, or 1.74 per cent - its biggest single-day gain since October 18 when it had rallied 520.91 points. This is the highest closing since November 11.
The index had lost 156 points in the previous session following the Reserve Bank's decision to hold interest rates that caught the market by surprise.
The broader NSE Nifty soared 144.80 points, or 1.79 per cent, to close the day at 8,246.85 after shuttling between 8,256.25 and 8,151.75. Continued buying by foreign funds too helped.
Financial stocks were among prominent gainers after RBI decided to remove the incremental Cash Reserve Ratio (CRR) of 100 per cent from December 10.
State Bank of India, HDFC Bank, ICICI Bank and Axis Bank advanced by up to 1.72 per cent.
The gains helped shares offset Wednesday's decline after the RBI's surprising rate action despite investors' concerns about the impact of the government's demonetization move.
The session belonged to Tata Steel, which climbed 4.62 per cent to Rs 431.55 after the company committed to a 1-year investment plan for the UK.
Tata Motors, Adani Ports, Hero MotoCorp, Bajaj Auto, ITC Ltd, Maruti Suzuki, Coal India, M&M, RIL, Cipla, Infosys and Sun Pharma too gained.
Barring NTPC, all Sensex shares gained.
"Today's rally was largely driven by positive global cues, helping the benchmark post single-day rally in almost 3-weeks," said Manoj Choraria, a Delhi-based NSE broker.
Major Asian indices closed higher tracking the overnight gains on the Wall Street, which made European shares rule strong in their early deals Thursday.
Japan's Nikkei climbed 1.45 percent, Hong Kong's Hang Seng surged 0.27 per cent, while China's Shanghai Composite Index fell 0.21 percent.
On the sectoral front, metal zoomed 2.93 per cent, followed by auto 2.63 per cent, infrastructure 1.87 percent, IT 1.74 percent and technology 1.56 percent and bankex 1.54 percent.
Broader markets such as the BSE mid-cap and small-cap rose 1.49 percent and 1.28 percent, respectively as investors indulged in widening their bets.
Foreign portfolio investors (FPIs) net bought shares worth Rs 193.66 crore Wednesday, according to provisional data.
(With inputs from agencies)