Benchmark indices ended the day higher and investors Diwali spirits were lifted after a sharp sell-off in markets seen in the last 10 days.
The Sensex ended the day with gains of 123 points, while the Nifty ended the day with gain of 23 points. Axis Bank led gainers after government allowed full fungibility in foreign direct investment (FDI) and foreign institutional investment (FII) in Indian private banks. ICICI Bank, Yes Bank and IndusInd Bank also saw buying support on account of the move.
Top Nifty gainers apart from Axis Bank were most of the metal and mining stocks. Hindalco, Vedanta and Tata Steel were among the gainers.
Among the few stocks that continued to see losses in trade were Bajaj Auto and ITC. Dr Reddy's ended the day lower once again after three of its plans received a US FDA warning letter earlier this week.
Realty stocks saw heavy buying after the government eased rules for foreign investors to exit and repatriate their investments. Unitech, Godrej Properties and IndiaBulls Real Estate were the top gainers from the space.
Meanwhile, markets across Europe were trading significantly higher led by gains in the German DAX, French CAC and the UK's FTSE, as investors awaited a speech By ECB President Mario draghi on further easing measures.