A day after the Union Budget caused some turmoil on Dalal Street, the BSE benchmark Sensex on Tuesday posted its biggest single-day gain in nearly seven years amid hopes of a rate cut by the Reserve Bank of India.
The Sensex vaulted up 777.35 points to close at 23,779.35. The Nifty closed 235.25 points higher to end at 7,222.30.
The strength of the rupee and positive Asian and European cues also helped the indices gain, , brokers said.
The Sensex closed 152.30 points lower after Monday's highly volatile session, mainly hit by a proposal for a higher dividend distribution tax on those earning more and on a rise in securities transaction tax on options trading.
Growth-oriented budgetary proposals like higher spending in infrastructure, the allocation of nearly Rs 36,000 crores for the farm sector and a higher credit target aimed at doubling farmers' income in five years buoyed sentiment, brokers said.
The government's commitment to keep the deficit at 3.5 per cent of GDP in 2016-17, too lifted mood, they added.
The rupee strengthening by 47 paise to 67.95 against the American currency (intra-day) at the forex market did its bit to boost the market.
Tuesday's gains mostly came from FMCG, auto, IT, capital goods, banking, technology and realty stocks, which rose up to 4.87 per cent, collectively.
Also, the 50-share NSE Nifty recaptured the crucial 7,200-level by closing 223.70 points higher, or 3.19 per cent up, at 7,210.75.
Among the 30-share Sensex constituents, ITC, Maruti Suzuki, Hero MotoCorp, ICICI Bank, Tata Motors, Adani Ports, TCS, L&T, GAIL and Wipro jumped by as much as 9.87 per cent.
Hong Kong's Hang Seng index surged 1.55 per cent while Japan's Nikkei rose 0.37 per cent. Europe was also in the blue in early trade.