Indian shares surged over one per cent, posting their first weekly gain in four and the biggest since January 23 week, as banks rallied ahead of the central bank's policy review next week.

Sentiment was also bolstered by firm European markets on the back of data showing manufacturing activity across the euro zone accelerated faster than previously thought.

The 30-share BSE index surged 302.65 points or 1.08 per cent at 28,260.14 and the 50-share NSE index Nifty jumped 95.25 points or 1.12 per cent at 8,586.25.

Sectoral indices

Among BSE sectoral indices, banking index was the star-performer and was up 2.37 per cent, followed by healthcare 2.31 per cent, realty 1.62 per cent and infrastructure 1.59 per cent, while IT index was down 1.11 per cent and TECk 0.5 per cent.

Banking stocks rose with the Bank Nifty Index adding 2.3 per cent ahead of the Reserve Bank of India's policy review on April 7. The central bank is expected to keep interest rates on hold although the markets are bracing for a potential surprise rate cut.

Gainers, losers

Sun Pharmaceutical surged 5.6 per cent, while Ranbaxy Laboratories rose 5.6 per cent ahead of a planned merger.

Trading in Ranbaxy shares will be suspended from Monday ahead of its merger with Sun Pharmaceutical.

Top five BSE gainers were Sun Pharma 5.51%, Tata Motors 2.65%, SBIN 2.42%, ICICI Bank 2.41% and Hindalco 2.32%, while the major losers were Infosys 2.00%, Maruti 1.53%, BHEL 1.34%, GAIL 1.09% and Cipla 0.25%.

Markets will remain closed on Thursday and Friday this week on account of Mahavir Jayanti and Good Friday, respectively.

Global markets

European stock markets made a solid start to the second quarter on Wednesday as data pointing to a gradual recovery in the euro zone economy gave investors fresh impetus after their blowout first few months of the year.

Europe’s benchmark FTSEurofirst 300 recovered from a early wobble to put London’s FTSE Germany’s DAX and France’s CAC up 0.5, 0.3 and 0.5 per cent, higher respectively as core bond markets yields nudged higher.

Asian stocks sagged on Wednesday, taking their lead from weaker US shares, while the dollar slid against the yen as Tokyo's Nikkei recoiled in volatile trade.

South Korean and Australian shares both lost 0.6 per cent and Malaysian and Indonesian stocks were also lower. MSCI's broadest index of Asia-Pacific shares outside Japan stood little changed, meandering in and out of the red.

Japan's Nikkei was down 0.9 per cent after losing as much as 1.4 per cent in volatile trade as investors sold recent gainers to lock in profits on the first day of the Japanese financial year. A soft Bank of Japan business sentiment survey also weighed on the Nikkei.

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