The 30-share BSE index jumped 1,016 points or 1.76 per cent to close at 58,650; while the broader NSE Nifty settled 293 points or 1.71 per cent at 17,470.
Top gainers in the sensex pack included Bajaj Finance, Maruti, SBI, Bajaj Finserv, Sun Pharma and Asian Paints with their shares rising as much as 3.62 per cent.
On the NSE platform, all sub-indices finished in green with Nifty PSU Bank, financial services, auto, IT gaining up to 2.57 per cent.
With this, the BSE sensex soared 1,903 points in the last 2 sessions.
Here are the top reasons behind the surge:
* Gains across sectors
All sectors from auto, banking, information technology, and banking stocks logged in strong gains.
At the closing bell, the Nifty Auto Index was up 2.31 per cent, while the Nifty IT and bank indexes were up 1.95 per cent and 1.82 per cent, respectively.
* RBI maintains status quo, prioritises growth
The Reserve Bank of India (RBI) held its key lending rate at a record low for the 9th consecutive time, prioritising growth amid risks from inflation and the new Omicron coronavirus variant.
RBI governor Shaktikanta Das said in his policy address that continued support was warranted for durable recovery, given the catching up of private consumption, which he said was still below pre-pandemic levels.
“It seems like RBI does not want to tinker much with the policy rates now given the nascent economic recovery and still looming uncertainty of the pandemic,” Amar Ambani, head of institutional equities, Yes Securities told news agency Reuters.
* Positive global cues
The MSCI world equity index, which tracks shares in 50 countries, was up 0.2 per cent – its highest since November 26, when Omicron fears first hit markets.
Asian shares hit a near two-week top on Wednesday, extending a global relief rally as investors cheered signs the Omicron variant of the coronavirus may be less disruptive to the world economy than first feared.
US S&P 500 and Nasdaq futures also gained, rising 0.3 per cent and 0.4 per cent, respectively, while pan-European Euro Stoxx 50 futures were flat.
* Easing concerns over Omicron
Bulls were enthused by a positive sentiment in global markets amid reports that the new coronavirus strain is unlikely to be more severe than the Delta variant, removing market concern regarding its economic impact.
“Positive global cues, coupled with the continuation of an accommodative policy stance of the RBI by holding rates fired up the bulls even as the central bank decided to enhance the variable reverse repo rate auctions to rebalance liquidity,” S Ranganathan, Head of Research at LKP Securities told news agency PTI.
The bullish undertone was reflected in the sectoral indices and advance-declines as the market breadth was healthy with small and midcaps too participating in the rally, he noted.
(With inputs from agencies)