Healthcare, auto and banking stole the show as the gains came ahead of the derivatives expiry slated later this week. The NSE Nifty too managed to top the 7,900-mark again. The 30-share BSE barometer stayed in the green throughout and ended higher by 195.42 points, or 0.76 percent, at 26,034.13 -- its highest close since December 2.

The gauge was down 11.59 points in the previous session on Thursday after an RBI report flagged concerns over weak corporate balance sheets and bad loans of banks. The market was shut on Friday for Christmas.

The 50-share NSE Nifty also retook the 7,900-level by jumping 64.10 points, or 0.82 per cent, to close at 7,925.15. Intra-day, it touched a high of 7,937.20.     "Banking stocks gained after RBI gave an informal assurance to banks that it will not place curbs against lenders if their stressed loans increase sharply on account of cleaning up their books," said Anand James, Co-head Technical Research Desk, Geojit BNP Paribas Financial Services Ltd.

Mood perked up after a strong rally on value-buying in battered stocks and covering-up of pending short positions by speculators ahead of the futures and options expiry on Thursday.

The rupee at 66.19, which flexed its muscles for the eighth straight day against the dollar, and a mixed overseas market contributed to the upside. The volume of business remained on a tight leash though, as foreign funds and investors kept their portfolios limited in view of an approaching year-end.

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