The S&&P BSE Sensex and NSE Nifty 50 indexes rebounded strongly on Tuesday led by gains in banking, financial services, FMCG and financial services shares. Reports of announcement of another stimulus package to boost the economy by the government helped in reigniting investors' confidence for equities, analysts said. In the first half of the session benchmarks traded in a choppy manner. However, sustained buying in private banking shares led by Kotak Mahindra Bank helped benchmarks gain strength in the second half of the session. The Sensex rose as much as 410 points and Nifty briefly moved closer to important psychological level of 11,900.
The Sensex ended 377 points or 0.94 per cent higher at 40,522 and Nifty 50 index advanced 122 points or 1.03 per cent to close at 11,889.
Eight of 11 sector gauges compiled by the National Stock Exchange ended higher led by the Nifty Private Bank index's over 3 per cent gain led by Kotak Mahindra Bank which rallied the most in seven months a day after it reported 27 per cent jump in net profit to Rs 2,184.48 crore.
Nifty Bank, Financial Services, FMCG, Pharma and Media indexes also rose between 1-3 per cent.
On the other hand, information technology, PSU banking and realty shares faced selling pressure.
Mid- and small-cap shares witnessed buying interest as the Nifty Midcap 100 index rose 1 per cent and Nifty Smallcap 100 index advanced 0.4 per cent.
Kotak Mahindra Bank was top Nifty gainer, the stock rallied 12 per cent, its biggest single-day gains since March 25, to close at Rs 1,582.
Shree Cements, Nestle India, Asian Paints, Bajaj Finance, NTPC, Divi's Labs, Larsen & Toubro, Cipla, Axis Bank, Britannia Industries and Bajaj Auto also ended higher between 2.5-7 per cent.
On the flipside, Tata Consultancy Services, Infosys, ONGC, Wipro, GAIL India, HDFC, State Bank of India, Sun Pharma and Coal India were among the losers.
The overall market breadth was neutral as 1,253 shares ended higher while 1,382 closed lower on the BSE.