Benchmark indices darted up for the fifth straight session Wednesday on across-the-board buying amid expectations of a shift in RBI's policy stance.
The BSE Sensex vaulted 358.42 points, or 0.98 per cent, to close at 36,975.23, while the broader NSE Nifty gained 128.10 points, or 1.17 per cent, to 11,062.45.
Both the indices closed at five-month highs, led by financial services, IT and metal stocks, amid persistent foreign fund inflows.
Analysts said investor sentiment was bullish ahead of the Reserve Bank of India's monetary policy meeting outcome, scheduled for Thursday.
The RBI’s Monetary Policy Committee (MPC) began its three-day meet Tuesday to decide on key rates amid expectations that it may change its policy stance to 'neutral' from 'calibrated tightening' on low inflation footprint, even as a rate cut was ruled out by many experts.
Only two of the 30 Sensex stocks ended in the red -- IndusInd Bank and Axis Bank, which slipped up to 0.54 per cent.
Bajaj Finance, Tata Steel, ONGC, Bajaj Auto, ICICI Bank, NTPC, Coal India, M&M and RIL led the winners' pack, spurting up to 4.34 per cent.
Broader indices, however, ended on a mixed note. The BSE LargeCap index rallied 1.13 per cent, mid-caps slipped 0.12 per cent and the small cap gauge inched up 0.05 per cent.
Sectorally, metal, IT, energy and auto led the rally, jumping up to 2.44 per cent.
“Domestic market rallied 1 per cent led by broad-based buying across sectors, Nifty breached its narrow trading band of 10650-10950 on expectation of a shift in RBI's policy stance and strong FII inflows.
“Additionally, drop in bond yield and marginal strength in rupee added strength to this expectation," said Vinod Nair, Head of Research, Geojit Financial Services.