Investors chose to stay away from the defensive pharma and IT sector, choosing the banking sector, which until recently was badly battered.
Shares of Dr Reddy's, Cipla and Sun Pharma were almost flat in trade from the pharma space, while IT shares like Infosys, HCL Tech and TCS were in the red in morning trade, but managed to notch up gains thereafter.
The gains in the stocks were almost negligible, thanks to the rupee which has rallied to almost the 62 levels, after hitting a lifetime low of 68.81 to the dollar.
On the other hand the banking sector is once again in the limelight with shares of Axis Bank soaring 8% in trade today, ICICI Bank also rallying 8%, Punjab national Bank 7%, Yes Bank 17%, IndusInd Bank 6% and State Bank of India gaining 6%.
Most of the PSU banks also gained anywhere between 3-8%. Investors are now dumping shares of pharma, IT and other defensives and are buying banking stocks ahead of the RBI's Monetary policy Review.
There is a belief that the policy may have something more substantial for banks, which has sparked a banking rally. Raghuram Rajan, the new RBI Governor is set to announce his first monetary policy on Friday.