The Indian equity indices experienced a highly volatile session on Wednesday, but managed to make gains, as apprehensions over the tension between the Reserve Bank of India (RBI) and the government gave way to investors clinching attractive deals.
Consequently, the S&P BSE Sensex gained 550 points to reclaim the 34,000-mark, while the NSE Nifty setteled above 10,300 points.
The day's trade started on a shaky ground as reports emerged of the growing spat between the RBI and the government. The speculation over RBI Governor Urjit Patel's resignation briefly led indices into the red during the afternoon session.
However, healthy buying in finance, banking stocks along with export-dominated IT and healthcare counters lifted the market higher.
On the other hand, metals index, however, lost over 1 percent contrary to the other sectoral indices on the National Stock Exchange which registered sharp gains in the range of 1 to 4 per cent.
In terms of currency, the rupee closed at Rs 73.95 to a US dollar from its previous close of 73.68 following a similar trend in all the major currencies, which traded lower.
Index-wise, the S&P BSE Sensex settled 550.92 points higher, or 1.63 per cent, at 34,442.05. It had opened at 33,963.09 from its previous close of 33,891.13.
The Sensex swung 875 points, touching an intra-day high of 34,463.38 and a low of 33,587.24.
The NSE's Nifty ended the day at 10,386.60, up 188.20 points or 1.85 per cent.
Besides, broader markets, S&P BSE MidCap gained 1.56 per cent, while S&P BSE SmallCap was up by 1.38 per cent also the market breadth was positive with 1,619 advances and 943 declines.
According to Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund: "Equity investors in India witnessed a relief rally on the last day of October 2018 as stock markets charged ahead with sharp gains."
"The markets surged in mid-afternoon trade after the government clarified on a tussle with the Reserve Bank of India and said that it respects and nurtures central bank's autonomy,"
HDFC Securities' Retail Research Head Deepak Jasani said: "Technically, with the Nifty rallying higher, the bulls seem to be in control,"
"Further upsides are likely once the immediate resistances of 10,396 are taken out. Crucial supports to watch for any weakness are at 10,285."
Investments wise, the provisional data with the exchanges showed that foreign institutional investors sold stocks worth Rs 193.65 crore on Wednesday while the domestic institutional investors bought scrip worth Rs 1,124.92 crore.
The month has ended with an foreign fund outflow to the tune of Rs 28,921 crore (NSDL), highest monthly outflow in the equity segment since 2002.
The top gainers on BSE were dominated by banking stocks, led by HDFC Bank, up 5.78 per cent at Rs 1,769.55; IndusInd Bank, up 4.47 per cent at Rs 1,424.45; Infosys, up 4.02 per cent at Rs 686.25; Axis Bank, up 3.43 per cent at Rs 581.90; and Yes Bank, up 3.30 per cent at Rs 188.05 a share.
The top losers were: Coal India down 3.53 per cent at Rs 266.15; Tata Steel, down 2.25 per cent at Rs 552.40; Maruti Suzuki, down 1.33 per cent at Rs 6,608.95; Adani Ports, down 0.85 per cent at Rs 319.10 and Kotak Bank down 0.60 per cent at Rs 1,118 per share.