The Nifty gained a staggering 156 points, at 5602, even as the Sensex crossed the 19,000 mark. The rupee saw sharp gains of 152 paise at 65.52 against the dollar, after new RBI governor announced a slew of measures on Wednesday to ease worries of the forex markets.
Banks stocks soared as the RBI allowed banks to raise foreign debt to the extent of 100 percent of their tier I capital, as against the 50 per cent currently.
The Bank Nifty which has been hammered out of shape in the recent weeks gained. It rose more then 8 per cent in trade, as investors rushed to buy banking stocks. Yes Bank rallied almost 13 per cent, while HDFC Bank, ICICI Bank, Axis Bank and IndusInd bank were all up more then 8 per cent.
Other Nifty stocks that rallied apart from the banking stocks was ONGC, Bharti Airtel, Ultratech Cement, Tata Power and Tata Motors.
Software stocks came in for some selling pressure on sharp gains in the rupee. Infosys and TCS both lost more then 2 per cent as investors moved away from technology stocks to banking stocks.
Heavyweights, ITC and Reliance also joined the party with ITC up more then 4 per cent in trade.
Metal stocks including names like Hindalco, Tata Steel and JSW Steel were also trading higher.
Meanwhile, markets in Asia were trading higher following strong overnight gains in the US markets. The Hong Kong's Hang Sang and the Singapore Strait Times were among the gainers.