Banking stocks were the biggest gainers, with the BSE banking index rising 3.5 per cent. Banks rose on expectations that the government's fiscal consolidation steps would increase chances of a rate cut from the RBI. Private lender ICICI Bank and HDFC Bank hit 52-week high. Mortgage lender HDFC also hit 52-week high.
IT stocks also saw strong gains as the Federal Reserve decision to launch new asset purchase programme will boost the US economy. The US and Europe contribute over two-thirds of revenues for Indian software services exporters. HCL Tech and TCS hit their 52-week high.
India's biggest FMCG major HUL also hit a 52-week high. The stock has seen strong gains over the last few months as volumes have risen leading to profit expansion.
At 10.30 a.m., ICICI Bank traded 4.5 per cent higher at Rs 1,002.10, HDFC was up 2 per cent at Rs 765.25, HDFC Bank traded 1.7 per cent higher at Rs 609.40, TCS traded 0.6 per cent higher at 1,425.65, HCL Tech gained 0.2 per cent at Rs 589.10, and HUL advanced 0.1 per cent at Rs 547.65.