The government's refusal to roll back any of the reforms also saw sentiments turning buoyant.

The noon gains were led by a sharp rally in banking stocks, with Axis Bank leading the gains from the index stocks surging more than 6%, while ICICI Bank rallied more than 5% and State Bank of India also rallied almost 5%.

Other shares that saw whopping gains were Reliance Infrastructure, Jaiprakash Associates, Hindalco and Sterlite Industries.

Interestingly, none of the Nifty stocks were trading in the red at 12.30 pm IST. The momentum in the markets is expected to continue depending on the political developments in the capital. Markets were particularly buoyant after a statement from the SP Chief and are now hoping for the government to unleash a fresh set of reforms.

Meanwhile, positive opening in Europe and strong closing in Asia also helped improve sentiments.

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