In a surprising development, the stock markets seem to have shrugged off the poor GDP numbers and the political slugfest over FDI in retail with the rally being led by the banking stocks.

The reaction has been variously described as a relief rally, as a response to the decision of Central banks of key developed nations to inject more liquidity and China slashing reserve ratio by 50 bps or as the Indian markets were in an oversold position. But the lingering question was whether the rally is sustainable.

Two-wheeler stocks such as Hero Motocorp and Bajaj Auto also joined the party with the Sensex up by about 430 points and the Nifty by about 120 points just ahead of the opening of the European markets.

In terms of value, SBI was the biggest gainer, moving up to Rs 1,824, an increase of Rs 61.65. The other big gainers among the banking stocks were ICICI Bank that was up Rs 43.80 to trade around Rs 756, Axis Bank that was trading at Rs 982.75, an increase of Rs 35 and PNB which was up by Rs 22.95 to trade around Rs 905.

Among the sectoral indices, the Bank Nifty was the biggest gainer with a gain of 357 points to reach 8,921 points.

Among the CNX Nifty stocks, the significant gainers were Hero Motocorp that was up by Rs 72.25 to trade around Rs 2,071, ACC which was up by Rs 30.70 to trade around Rs 1,175 and L&T that has moved up to Rs 1,311, an increase of Rs 39.30. Infosys also rallied to Rs 2,669, a gain of Rs 62.15 and Bajaj Auto was up by Rs 38.90 to trade around Rs 1,707.

Among the handful of Nifty losers were Dr Reddy’s, Bharti Airtel and BPCL but the losses were insignificant.

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