Benchmark indices ended the day higher for a second straight day, though markets closed lower for the week. Global cues were not very robust with most of Europe trading lower and Asian markets.
The Sensex ended the day with gains of 278 points, while the Nifty slipped 85 points in trade.
Today's gains were led by a surge in PSU banking stocks after reports that the new infra fund to be launched by the government may buy out distressed assets of some government banks. This led to a spectacular rally in some of the banking stocks like Canara Bank, Bank of India and State Bank of India.
Shares in Bajaj Finance were the star performer in trade, after its results surprised the markets. The stock hit a new 52-week high in trade. Dishman Pharma too ended the day higher after its results beat street estimates.
The midcap index rallied sharply, after PSU banking stocks gained ground there. Jindal Steel, Reliance Capital and SKS were the big gainers from the space.
Lupin rallied after the company reported better than expected quarterly numbers.
Goodyear India and Eicher were the other stocks that gained on the back of good results. Meanwhile, markets across Europe were trading mixed with the German DAX down, while the French CAC and the UK's FTSE higher.