Buying at lower levels and hopes of an easing monitory policy with the appointment of Shaktikanta Das as the new RBI Governor pushed the key equity indices 1.8 per cent higher on Wednesday.
That apart, positivity in Asian markets also contributed to the gains by the domestic market.
According to analysts, investors were optimistic over the appointment of Das as the Reserve Bank head as it might lead to a more liberal monetary policy.
All the sectors gained, led by financial and auto stocks which advanced over 3 per cent, the highest increase among all the sectors on BSE.
The Sensex settled higher by 1.79 per cent, or 629.06 points, at 35,779.07, from its previous close of 35,150.01. It touched an intra-day high of 35,826.58 and a low of 35,167.47.
The Nifty50 advanced 188.45 points or 1.79 per cent to close the session at 10,737.60.
The market breadth was positive as the number of advancing stocks was thrice the declining ones. A total of 1,910 stocks advanced while 652 declined.
“The positivity is surprising but there is a possibility that the markets are comfortable from the fact that either the Congress or BJP will be dominant during the general elections,” Rusmik Oza, Head-Fundamental Research, Kotak Securities, told IANS.
“…historically the economy has grown better with a majority or a coalition led by either BJP or Congress.”
The benchmark Brent Crude traded at $60.97 per barrel while the rupee stood at 71.88 to a US dollar from its previous close of 71.85.
“With the crude oil prices under control and no hike in interest rates, the corporates are expected to post good results. The investors are now shifting their focus from elections,” said Astha Jain, a senior analyst at Hem Securities.