Well, after a 300 points drop in the previous session, bulls put up a strong show on Thursday fuelled by some short coverings and formation of long positions.

After a large gap-up opening, bulls managed to push the index higher by over 500 points on the Sensex led by banks, after the Reserve Bank of India (RBI) maintained its status quo stance on rates but guided for lower inflation trajectory.

RBI has decided to hold the key policy rates in the first Monetary Policy decision for 2018-19\.

While status quo on policy rates were on expected lines, the Goldilocks scenario that RBI has outlined for the new fiscal- with higher growth expectations and lower inflationary forecasts- could very well indicate rates on hold for the whole year

“It will boost the general market sentiments and bond markets in particular. The fact that the committee has looked through the volatility episodes in the financial market to balance the tightrope walk between rising global rates and nascent domestic growth reiterates its “data dependency” approach,” Rajni Thakur, Economist, RBL Bank said.

Devang Mehta, Head – Equity Advisory, Centrum Wealth Management said that with revised lower Inflation trajectory by RBI, equity markets were clearly enthused.

“We have been constantly advising clients to accumulate good quality stocks in a market which has corrected both in terms of valuations & price points. We continue to be bullish on domestic themes where there is good predictability of earnings growth,” he said.

The Nifty50 closed above its crucial short-term moving averages and 200-days exponential moving average (DEMA) at 10,325, up 196 points or 1.94 percent. It clocked best one-day in gain in last two years.

The S&P BSE Sensex ended 577 points higher at 33,596 or 1.75 percent. It hit an intraday low of 33267 and an intraday high of 33,637 in trade today.

The benchmark indices gain over 1 percent while broader indices surge over 2 percent. The market breadth was in favour of advances with advance-decline ratio at 6:1.

Only 2 Nifty Stocks (Cipla & Bharti Airtel) closed in the red while financials contributed 50 percent to Nifty gains. All Nifty bank stocks closed higher with ICICI Bank, Kotak Mahindra Bank being top gainers.

The put-call ratio also improved to 1.37 from Wednesday’s close of 1.30.

On the sectoral front, the S&P BSE Metal index rose 4%, followed by banks which gained 2.7%, and realty index was up 2.5%.

Top Sensex gainers include names like State Bank of India (up 4.6%), Tata Motors DVR (up 3.9%), Tata Steel (up 3.6%), ICICI Bank (up 3.5%), and Kotak Mahindra Bank (up 3.3%).