The benchmark BSE Sensex today more than made up its lost ground by rebounding over 195 points to close at 26.034.13 -- nearly 1-month high -- on value buying in beaten-down stocks and short-covering amid a thin year-end trade and a mixed global trend.
Healthcare, auto and banking stole the show as the gains came ahead of the derivatives expiry slated later this week.
The NSE Nifty too managed to top the 7,900-mark again.
The 30-share BSE barometer stayed in the green throughout and ended higher by 195.42 points, or 0.76 per cent, at 26,034.13 -- its highest close since December 2.
The gauge was down 11.59 points in the previous session on Thursday after an RBI report flagged concerns over weak corporate balance sheets and bad loans of banks.
The market was shut on Friday for Christmas.
The 50-share NSE Nifty also retook the 7,900-level by jumping 64.10 points, or 0.82 per cent, to close at 7,925.15. Intra-day, it touched a high of 7,937.20.
"Banking stocks gained after RBI gave an informal assurance to banks that it will not place curbs against lenders if their stressed loans increase sharply on account of cleaning up their books," said Anand James, Co-head Technical Research Desk, Geojit BNP Paribas Financial Services Ltd.
Mood perked up after a strong rally on value-buying in battered stocks and covering-up of pending short positions by speculators ahead of the futures and options expiry on Thursday.
The rupee at 66.19, which flexed its muscles for the eighth straight day against the dollar, and a mixed overseas market contributed to the upside.
The volume of business remained on a tight leash though, as foreign funds and investors kept their portfolios limited in view of an approaching year-end.
Dr Reddy's led the gainers pack, up 3.52 per cent to close at Rs 3,116.35, followed by NTPC (3.38 per cent).
Tata Motors too firmed up 2.84 per cent while Sun Pharma advanced 2.52 per cent.
RIL ended 0.76 per cent higher at Rs 1,008.55 after its telecom arm Reliance Jio rolled out its 4G network for its employees, in a prelude to a commercial launch next year.
ONGC rose 2.56 per cent, followed by ICICI Bank (2.46 per cent), Lupin (1.98 per cent), Adani Ports (1.16 per cent), Cipla (1.06 per cent) and Maruti Suzuki (0.89 per cent).
However, shares of Tata Steel, Bharti Airtel, M&M, HDFC, BHEL, GAIL and L&T ended up to 3.59 per cent lower.
Sectorally, the BSE healthcare index gained the most by rising 1.34 per cent, followed by auto, power, banking, PSU and oil and gas.
The BSE small-cap index rose 0.47 per cent and the mid-cap index 0.14 per cent.
The global trend in the rest of Asia remained mixed while Europe was in a better shape in early trade.
Foreign portfolio investors (FPIs) net sold shares worth Rs 112.03 crore last Thursday, data from stock exchanges showed.
"Markets also cheered Prime Minister's new initiative of
Start-up India Stand Up India lined up for launch next month," added James.
As many as 22 out of the 30 constituents in the BSE Sensex ended higher while 8 closed lower.
Pramit Brahmbhatt, Veracity Group CEO, said: "On the sectoral front, it was across the buying except metal counters, which bucked the trend."
The market breadth turned positive as 1,540 stocks ended higher, 1,154 lower, while 260 ruled steady out of the total 2954 stocks. The total turnover came down to Rs 2,609.55 crore, from Rs 2,732.75 crore last Thursday.
On market outlook, Achin Goel, Head, Wealth Management & Financial Planning, Bonanza Portfolio, said: "Overall, in the near term, we believe that the markets would continue to remain strong for upcoming trading sessions and remain between 8,100-8,500 talking about the medium term.
