The benchmark Sensex went from strength to strength as it rallied over 700 points after buying gained momentum across sectors led by FMCG, banks, IT and auto as talks of a likely repo rate cut got louder after the presentation of the Budget. The broader Nifty traded at the 7,200 level.

"Markets are rallying because the budget was good - fiscal deficit commitments were adhered to and there was no tinkering on the capital gains tax structure," said Varun Khandelwal, a director at advisory services provider Bullero Capital.

"Additionally, pressures in global markets have alleviated on the back of PBoC (People's Bank of China) liquidity injections and in anticipation of dovish stances by the Fed, and the ECB."

Traders expressed hope the RBI may step in to cut the repo rate even before its next scheduled policy review on April 5 given the central bank had pinned any further easing on the government's fiscal stance at its policy review last month.

A combination of a rate cut intended to support economic growth along with the government's pledge for fiscal discipline is also raising market hopes of a reversal in some of the strong foreign outflows this year.

"The momentum we've seen in rupee is because of the fiscal deficit and a possible rate cut but then at 68 (rupees to the dollar) RBI might start picking up dollars as it is a psychological support," said Paresh Nayar, FX and fixed-income head, First Rand Bank in Mumbai.

Finance Minister Arun Jaitley’s decision to stay on the fiscal consolidation path raised optimism of a rate reduction by RBI to spark private investment and boost growth.

Sentiment remained upbeat after the Union Budget provided a higher outlay for infrastructure and farming sectors.

Fund managers lapped up mid-cap and small-cap shares too.

The 30-share barometer quoted at 23,779.35 at about 3.35 pm, a jump of 777.35 points, or 3.38 per cent.

The NSE Nifty climbed 235.25 points, or 3.37 per cent, to 7,222.30.

Of the 2,579 stocks traded on the BSE, 1,885 advanced, 574 declined and 120 remained unchanged.

On the Nifty, 47 stocks advanced while 3 declined.

The top gainers on the BSE were ITC 9.91 per cent, ICICI Bank 7.95 per cent, Maruti 7.8 per cent, Hero MotoCorp 6.07 per cent, Adani Ports 5.30 per cent, GAIL 5.04 per cent, Tata Motors 5.01 per cent, Axis Bank 4.4 per cent, TCS 4.27 per cent and L&T 4.12 per cent.

Foreign portfolio investors (FPIs) remained sellers as they net sold shares worth Rs 2,018.02 crore yesterday, provisional data from stock exchanges showed.

The BSE 30-share index had lost 152.30 in a highly volatile trade yesterday, mainly hit by a proposal for a higher dividend distribution tax on those earning more and a one on raising securities transaction tax on options trading.

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