Benchmark indices surged in trade following a set of solid global cues and on expectations of an interest rate cut. Hopes that adhering to the fiscal deficit would lead to an interest rate cut, saw heavy buying in banking stocks.

ICICI Bank, another heavyweight added a huge 6 per cent in trade, on hopes that there would be interest rate cut. But, much of the gains in the Nifty came on the back of heavyweight ITC, which has the highest weightage in the Sensex.

Auto stocks came in for some heavy buying support with Hero Motors, Maruti and Tata Motors among the big gainers in trade.

Select stocks like Jain Irrigation gained ground as these are direct beneficiaries from the Union Budget 2016-17. Some other midcap stocks saw huge buying support with the index itself gaining 3 per cent. Among the notable gainers were Adani Power, Jubilant Foodworks and Sun TV.

ONGC lost ground after its rating was cut by a leading foreign brokerage. Hindustan Unilever and Dr Reddys were the only stocks from the Nifty that were subdued and ended the day marginally lower.

Meanwhile, European markets staged a smart rally in trade, led by gains in the German DAX, French CAC and the UK's FTSE.

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