The Sensex was trading higher by 178 points, while the Nifty rallied 55 points in trade. Banking stocks surged in trade following the RBI move. Yes Bank was up 7%, at Rs 339, while IndusInd Bank was up 6%, Axis Bank was up 3.63%, Bank of Baroda up 3.5% and Union Bank of India up 3%.
Apart from the banking stocks the other notable gainers in trade were DLF and Larsen and Toubro. Among the stocks that declined in trade were the software stocks which were trading rather subdued. HCL Tech and Tata Consultancy Services were both lower in trade,.
Pharma stocks were also weak in trade today with Ranbaxy Labs and Lupin Labs both trading lower.
Mid Cap stocks continued to rally for the second day in a row with Apollo Tyres gaining on hopes that the problems with Cooper Tire & Rubber Co may not result in a takeover of the latter. The stock was up 2 per cent in trade.
Other notable mid cap gainers were HDIL, IDBI Bank, Oriental Bank and Syndicate Bank.
The Coal India stock was trading weak for the second successive day after reports that the company's FPO offer may be scheduled for December.
Bombay Dyeing which had rallied sharply in trade on Monday on reports that P/E firms had shown interest in the company was trading lower.
Meanwhile, markets in Asia were mostly trading with gains ignoring the partial government closure and the debt ceiling worries in the US.
The Indonesian Jakarta Composite and the Hong Kong's Hang Sang were trading with gains of 1 per cent each.