The Sensex ended the day higher by 480 points, while the Nifty rallied 139 points in trade. Leading the set of gainers from the Nifty was heavyweight HDFC. The shares surged more than three per cent, while Hero Motor Corp also rallied more than 4 per cent in trade. Other notable Nifty gainers were ICICI Bank, Larsen and Toubro, Gail and Dr Reddy's.
The only stocks that lost ground in trade were Infosys and Hindustan Unilever. Mid cap stocks also saw good buying interest with Adani Power rallying a huge 8 per cent, while Reliance Power and Unitech were the other gainers in trade.
Sun Pharma gained ground after the company signed an agreement with Merck for exclusive drug licensing.
MCX India gained ground after the FMC said that MCX could launch contracts for 2015 after compliance of order.
PSU banking stocks which have seen some huge unwinding pressure recently gained ground and ended the day sharply higher. Andhra Bank rallied a huge 4 per cent at close.
Meanwhile, most of the European markets also rallied as the US Fed said that interest rates would not be hiked anytime soon.
The German DAX, French CAC and the European's FTSE were trading with gains.