Domestic equity benchmarks S&P BSE Sensex and NSE Nifty 50 rallied for a second straight day to close at fresh four-week highs on Thursday, led by gains in HDFC Bank, HDFC, Reliance Industries, Larsen & Toubro and Maruti Suzuki. The indices had a gap-up opening on the back of strong global cues and subsequently built on its gains. Meanwhile, analysts said the upmove was largely a short-covering rally due to the expiry of derivatives (futures and options) contracts for May. The Sensex rose as much as 662 points and Nifty 50 index briefly moved above its important psychological level of 9,500 during the session at the highest point of the day.
The Sensex ended at 32,200.59, up 595.37 points or 1.88 per cent, and the Nifty 50 index surged 175 points or 1.88 per cent to close at 9,490.10.
For the May F&O series, the Sensex fell 4.49 per cent and the Nifty 50 declined 3.75 per cent.
"The banking stocks have been a major underperformer and drag in the Indian markets. Some stocks had hit fresh lows and traders chipped in and sought bargains," said Saurabh Jain, assistant vice president of research at SMC Global Securities.
"There are concerns with respect to the banking sector and the delinquency which is going to rise. This surge mostly looks like a small bounce," he added.
All sectoral gauges barring the Nifty PSU bank index ended higher, led by a 3.65 per cent gain in the Nifty Auto index. The Nifty Media, Private Bank, Realty, Bank, Financial Services and Metal indices rose between 2.5 per cent and 3.6 per cent each.
Mid- and small-cap shares also witnessed buying interest as the Nifty Midcap 100 and Nifty Smallcap 100 indices rose 1.7 per cent each.
Zee Entertainment was top gainer in the Nifty 50 basket of shares, rising nearly 10 per cent to close at Rs 180.20 on the BSE. Eicher Motors, Larsen & Toubro, Hero MotoCorp, HDFC, IndusInd Bank, HDFC, Maruti Suzuki, Bharti Infratel and Hindalco rose between 3.8 per cent and 7.3 per cent.
On the flip side, Wipro, ITC, Cipla, State Bank of India, JSW Steel, Bharti Airtel and Dr Reddy's Laboratories were among the notable losers.
The overall market breadth was extremely positive as 1,245 shares closed higher while 531 ended lower on the NSE.