Benchmark indices which began lower in early morning trade, after Reserve Bank of India Governor Raghuram Rajan said that he would not be seeking another term, recovered and ended higher.
This led to a solid surge in the European indices, which gained almost 3 per cent in trade. The Sensex ended 241 points higher in trade, while the Nifty rallied 68 points.
Leading the set of gainers in trade were metal stocks like Vedanta and Hindalco. IT stocks were in the limelight after the rupee weakened against the dollar, following the Raghuram Rajan news. Check currency rates here
Banking stocks led by PSU banking stocks surged in trade on hopes that the new Governor to be appointed could be liberal in terms of inflation.
Meanwhile, most of the Asian markets ended the day with gains led by the Japanese Nikkei and the Hong Kong's Hang Sang. The rupee recovered and was last trading at Rs 67.30 to the dollar, after opening at 67.70 to the US dollar, thanks to the recovery in European markets.