Indian stock markets roared back after the Diwali break on Wednesday, with the Sensex jumping 773 points and the Nifty closing above 25,250 as buying in banking, auto and public-sector bank stocks powered a broad rally.

The BSE Sensex climbed 772.75 points, or 0.95 per cent, to close at 81,879.40, while the NSE Nifty 50 rose 210.40 points, or 0.84 per cent, to settle at 25,255.05. Both benchmarks closed at fresh nine-month highs, capping a strong start to the post-festival trading week.

Strong start, steady finish

Markets opened sharply higher after Tuesday's Diwali-Balipratipada holiday, with the Sensex surging more than 1,300 points in early trade to an intraday high of 82,520.40 — its highest level since February — and the Nifty touching 25,424.35. Some of the early gains were trimmed through the session, but the benchmarks held on to most of the advance into the close.

The rally was broad-based. Nifty Bank gained 1,051 points to close at 60,792, near its record high, and the midcap index rose 497 points to 61,519. Mahindra & Mahindra and IndiGo were among the top gainers, rising around 4 per cent each, while Trent added about 3 per cent. Adani Ports was among the notable losers, falling around 2 per cent.

What drove the rally

Lower crude oil prices and continued foreign fund inflows supported sentiment, with investors also encouraged by better-than-expected second-quarter corporate results. Banking stocks led the advance, with public-sector banks and auto shares also in demand, and market breadth stayed positive through the session.

The gains extended the strong run Indian equities have seen since the start of November, with foreign investors returning as buyers after months of selling. Analysts say the combination of falling energy costs, steady domestic flows and improving earnings has given the market a firmer footing heading into the final weeks of the year.

What to watch

Traders will now watch whether the momentum holds into the rest of the week, with global cues, crude oil prices and the flow of foreign money likely to set the tone. For now, the post-Diwali session has given investors plenty to cheer: both headline indices at nine-month highs, banks near records, and breadth firmly on the side of the buyers.