The partial US govt shutdown also pushed the dollar lower against a host of currencies, including the Indian rupee, which boosted market sentiment
The Sensex ended the day higher by 381 points (provisional), while the Nifty rallied 129 points in trade. The star performer in trade today were the metal and banking stocks. Sesa Goa jumped 8% in trade, while Axis Bank gained more then 6%.
Other notable winners in trade were Jaiprakash Associates, IndusInd Bank, Ultratech Cement, Tata Steel and Tata Power.
Tata Consultancy Services jumped almost 4% in trade, after Goldman Sachs upgraded the stock. Other IT stocks too rallied along with TCS, including HCL Tech and Wipro.
FMCG stocks, however, performed poorly in trade with notable losers being ITC and Hindustan Unilever. There were no other Nifty losers in trade today.
PSU banks along with private sector banks had a good session with Bank of Baroda, Bank of India and Oriental Bank of Commerce jumping almost 5% in trade.
Realty stocks also had a good day of trade with DLF, Unitech and DB Realty among the gainers.
Gitanjali Gems lost ground in trade today after the promoters rejected a dividend payout by the company.
Meanwhile, markets in Europe were having a quiet day of trade. The German DAX, the French CAC and the UK's FTSE were marginally lower in trade.