MUMBAI, Feb 12 (Reuters): Domestic shares rallied around 1 per cent, in a sharp turnaround from earlier mild losses after the leaders of Germany, France, Russia and Ukraine reached a deal to end fighting in eastern Ukraine, sparking gains in global markets.
Traders also cited relief after Finance Minister Arun Jaitley vowed to continue with economic reforms, despite a setback for the ruling party in the recently concluded Delhi State elections.
The developments helped overcome earlier falls by bank shares over concerns that the country's largest lender, State Bank of India may post lower-than-expected December-quarter earnings on Friday.
"Two things helped markets, one the Russia and Ukraine agree ceasefire, second the assurance by finance minister that the government will go ahead with the reforms," said Deven Choksey, managing director at KR Choksey Securities.
The NSE's Nifty index rose 0.98 per cent to 8,711.55, marking its third consecutive daily gain, after earlier falling as much as 0.33 per cent.
The BSE Sensex rose 271 points, or 0.95 per cent, to 28,805.10.
Gains were led by drugmakers such as Dr Reddy's Laboratories Ltd and Cipla Ltd, which have a significant exposure to the Russian market
Gains were led by drugmakers such as Dr Reddy's Laboratories Ltd and Cipla Ltd, which have a significant exposure to the Russian market.
Dr. Reddy's gained 5.7 per cent, while Cipla ended 3.8 per cent higher.
Lenders even reversed earlier falls, with ICICI Bank ending up 1.3 per cent after earlier falling as much as 1.4 per cent. But State Bank of India fell 0.6 per cent.
