The Sensex and the Nifty opened the day higher led by strong gains across all sectors. The Sensex was trading higher by 304 points, while the Nifty was higher by 96 points on the back of strong gains across Asian markets. Huge gains in the US indices also helped boost sentiments.
Shares in Lakshmi Vilas Bank rallied for a second day in a row and the stock was up a huge 4 per cent again in trade.
PSU banking stocks which have been hammered out of shape in the last few days saw buying support with Andhra Bank, State Bank of India, IOB and Dena Bank being among the winners.
Financial Technologies saw buying interest after the company's proposed decision to sell stake in an African bourse.
Mid cap stocks also saw huge buying interest with Crompton Greaves rallying 2 per cent, while other winners were Reliance, Unitech and Voltas.
Meanwhile, markets across Asia rallied across the board after strong overnight closings in the US.