Sensex ends 510 points higher on banks, oil & gas support

It was in the making for quite some time, and finally happened today. A relief rally, and a mighty fine one at that. The benchmark index Sensex shot up 3% - that's over 500 point jump - while the Nifty closed just below the 4700-mark, up 148 points.

The pullback was led by short covering rally in banks, technology, oil & gas and capital goods stocks, which notched up good gains for themselves.

However, experts are not yet jumping out of their seats as it looks more technical in nature as pointed out by Sudip Bandyopadhyay, MD & CEO of Destimoney Securities.

The rally was fueled by positive global cues in the morning. The US housing starts for November saw a sharp uptick, at 1.5-year high, and unexpected improvement in the German business sentiment index and better-than-expected Spanish bond auctions buoyed sentiment further.

Federal Reserve proposed new capital and liquidity rules for US banks, which would be rolled out in two phases.

According to Bandyopadhyay, the rally is also supported by the fact that ECB has taken some steps to enhance liquidity to ensure that the bond auctions go through.