Overnight gains on the US bourses with investors tapering the soon rate hike outlook triggered a rally in broader Asian and European markets, helping in reviving the domestic sentiment as well after a brief phase of sluggishness. Besides, a sustained FII buying, a slew of positive corporate results as well as RBI's bullish annual growth report also added to positive cues.

"Market regained its strength as FIIs continue to pour into the domestic market despite a likely hike in FED rate. FII inflow has improved post a muted trend seen last week awaiting the FED chair's speech last Friday. Global markets continue to be positive as investors have largely factored an interest rate hike in 2016.", Said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

A firm trading momentum witnessed as retail investors and funds piled up positions in key frontline shares across the sectors led by auto, IT, capital goods, banks, financials, metals, consumer durables, oil & gas, power, realty, tech infrastructure, healthcare, PSUs, energy, utilities and basic materials. The second-line midcap and smallcap companies also witnessed heavy buying; however, the telecom sector saw selling.

Reserve Bank reported a near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 per cent this year, primarily due to better monsoon, as well as better money in the hands of government employees owing to the 7th Pay Commission implementation, while it underlined bearish global growth.

The 30-share Sensex resumed at 28,012.46 and moved between a high of 28,478.02 and a low of 28,010.66 before concluding at 28,343.01, showing a gain of 440.35, or 1.58 per cent over its last close. The Sensex had closed at 28,370.84 on July 23, 2015. The NSE Nifty also climbed 136.90 points, or 1.59 per cent, to 8,744.35 after trading between 8,750.60 and 8,642.25.

Elsewhere, Asian stocks ended higher, while European market also opened on a positive note tracking overnight gains in the US market weighed by increased prospects for Federal Reserve rate hike this year. Meanwhile, Foreign portfolio investors (FPIs) bought shares worth a net Rs 286.52 crore yesterday, as per provisional data released by the stock exchanges.

Among the sectoral indices, auto climbed 1.81 per cent, IT 1.77 per cent, banking 1.49 per cent, finance 1.45 per cent, FMCG 1.41 per cent, healthcare 1.39 per cent, tech 1.29 per cent, utilities 1.26 per cent, capital goods 1.05 per cent, oil & gas 1.14 per cent, metal 1.05 per cent, realty 0.97 per cent and industrials 0.84 per cent. While, telecom dropped by 1.20 per cent. The BSE Mid-Cap index and the BSE Small-Cap index both provisionally gained by 0.80 and 1.02 per cent, respectively.

Both these indices underperformed the Sensex. Out of 30-index stocks, 29 scrips ended with gains, while 1 registered loss. Major gainers were, AsianPaint 3.20 per cent, followed by Bajaj Auto 3.09 per cent, Maruti 2.83 per cent, GAIL 2.69 per cent, HDFC Bank 2.35 per cent, ICICI Bank 2.30 per cent, Wipro 2.20 per cent, HindUnilvr 2.17 per cent, Sun Pharma 2.05 per cent, Lupin 2.01 per cent, HeroMotoco 1.98 per cent, ONGC 1.88 per cent, TCS 1.88 per cent and Infosys 1.83 per cent.

Other winners were ITC 1.78 per cent, Cipla 1.66 per cent, PowerGrid 1.55 per cent, NTPC 1.51 per cent, NTPC 1.51 per cent, Dr Reddy 1.50, SBIN 1.39 per cent, Tata Steel 1.26 per cent, HDFC 1.25 per cent and Larsen 1.21 per cent.

However, Airtel was the only losser by 2.82 per cent. The market breadth indicating the overall health of the market was strong. The market breadth was positive as 1,638 stocks ended in green while 1,072 stocks finished in red and 216 ruled steady. The total turnover rose to Rs 3,458.43 crore from Rs 2,920.54 crore as on Monday.