The sluggish sentiment changed after BSP's decision which is likely to pave the way for approval of FDI in retail during the vote in the Upper House of Parliament tomorrow.
As the news poured in, the 50-share index, which was languishing in deep red, rebounded smartly and closed at a fresh 23-month high.
Gains were led by financial, FMCG, oil & gas, auto, infra, metal and realty stocks. Retail stocks were flavour of the day again, hitting multi-month highs.
However, it was a bad day for Indian technology stocks which took a beating after IT major Cognizant came out with a lower revenue growth projection for the current year. The Nasdaq-listed firm follows January-December fiscal.
Earlier, trading got off to a positive start, but soon encountered bouts of profit taking. The sell-off spread and gained momentum later in the day before recovering.
A win in the FDI vote will send a clear signal to overseas investors that the Government is serious about reforms, traders said.
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The Nifty swung widely between a high of 5,942.55 and a low of 5,838.90 before finishing at 5,930.90, a rise of 30.40 points, or 0.52 per cent, over the last close.
JP Associates, Axis Bank, RInfra, BHEL, Tata Motors, ICICI Bank, SBIN, DLF, IDFC and NTPC were the top Nifty gainers. Key losers included HCL Tech, Bharti Airtel, Infosys, TCS, Ranbaxy, ACC, Asian Paint, Cipla, Sun Pharma and Siemens.
The turnover in cash segment jumped to Rs 13,609.54 crore from Rs 13,144.13 crore yesterday. Overall, 9,197.08 lakh shares changed hands in 68,51,173 trades. Totol market capitalisation stood at Rs 66,99,064 crore.