The Indian benchmark equity indices, Sensex and Nifty, rallied almost nine percent on Tuesday, registering their best trading day since 2009.

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Sensex ended 2,476.26 points or 8.97 percent higher at 30,067.21 and the Nifty rallied 708.40 points or 8.76 percent to close at 8,792.20.

Broad-based buying was witnessed across sectors. Nifty Pharma and Nifty Bank were the best performers with over 10 percent gains followed by Nifty Auto, Nifty Financial Services, Nifty FMCG and Nifty IT.

These are some reasons behind the rally on Dalal Street:

Gains in global markets:

Asian stock markets rallied for a second day on Tuesday buoyed by tentative signs the coronavirus crisis may be leveling off in New York and receding in Europe.

Japan's Nikkei rose 2 percent and has erased most of last week's losses after Prime Minister Shinzo Abe promised a massive $991 billion economic stimulus package - equal to 20 percent of GDP.

MSCI's broadest index of Asia-Pacific shares outside Japan pared early gains, but rose almost 1 percent.

India may attract $1.3 billion in passive flows

Morgan Stanley expects MSCI to rebalance MSCI India weight in the emerging market (EM) index after India moved into a new regime that increased sector-wise limits for the Foreign Portfolio Investment (FPI).

Value buying

Investors opted for value buying at lower levels after the Indian market fell almost 30 percent from its recent high that put benchmark indices in an oversold zone.

India lifts restrictions on 24 drug exports

The government has lifted restrictions on the export of 24 pharmaceutical ingredients and medicines made from them It had imposed the restrictions last month as the coronavirus outbreak disrupted global supply chains.

The 26 active pharmaceutical ingredients and medicines accounted for 10 percent of all Indian pharmaceutical exports.

Further, the Indian government also decided to lift a partial ban on hydroxychloroquine drug used for the treatment of coronavirus.

First Published:Apr 7, 2020 2:32 PM IST