Equity benchmark indices Sensex and Nifty rebounded sharply on Thursday tracking global cues, while back home, hopes of rising banking transactions, including deposits in the wake of changes to the currency regime lifted bank stocks.
The BSE Sensex gained 265 points to close at 27,517 while the NSE Nifty ended at 8,525, up 94 points.
The Nifty PSU Bank gained 8.72 percent, led by Bank of India, PNB, Union Bank, Syndicate Bank, Allahabad Bank, Andhra Bank and State Bank of India that rose in the range of 8 to 14 percent.
Top Sensex and Nifty gainers included Tata Steel, State Bank of India, Cipla, Coal India, Bank of Baroda and Hindalco.
Tata Steel closed 9.27 percent higher at Rs 436, SBI was up 8.4 percent at Rs 281, Cipla gained 6.85 to end at Rs 564, while Coal India closed at Rs 333, a gain of 4.91 percent.
A market analyst said that the end to global uncertainty over the US presidential elections with the victory of Donald Trump's victory also boosted sentiments.
"With markets relieved of uncertainty, risk appetite improved vastly, pushing indices above pre-US election levels. Meanwhile, as banking activities resumed, and disbursal of new currencies started, banking stocks also surged, with the increased footfalls in branches raising the possibility of rising deposits and transactions going forward, which augurs well for the banking sector," Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, said in a note.
Foreign institutional investors (FIIs/FPIs) were net sellers of Indian equities worth Rs 733 crore while domestic institutional investors (DIIs) were net buyers of stocks worth Rs 639 crore, according to provisional data published by the National Stock Exchange (NSE).
Earlier, markets opened on a buoyant note after the crash of Wednesday caused by uncertainty after the "surgical strike" on black money and the uncertainty in the US presidential election results.
Shares of gold companies such as Titan, PC Jeweller, Tribhovandas Bhimji Zaveri (TBZ) and Gitanjali Gems were trading with significant gains in the morning.