The S&P BSE Sensex rallied over 500 points intraday, snapping the seven-session long losing streak, while the broader Nifty50 also regained its crucial 10,600 mark.

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The Sensex, however, is still over 1800 points down from its peak 36443.98 hit on January 29, 2018.

Meanwhile, volatility index India VIX slipped over 9 per cent, while the market breadth remained strong. On the BSE, 2,156 stocks rose, 573 stocks declined, while 114 stocks remained unchanged.

Sanjiv Bhasin, EVP - Markets & Corporate Affairs, India Infoline suggested to buy on dips, but added the Nifty50 may fall below 10,000 in next few weeks as the volatility will remain strong in March as market participants book profits at the end of financial year.

Here are the key reasons why market rallied today: 

RBI less hawkish

Fears of the Reserve Bank going for a "rate hike" are overdone and there is still room for a 25 bps rate cut in the August monetary policy review, provided rains are normal, says a report.

Global financial services major Bank of America Merrill Lynch (BofAML), termed the latest RBI policy as "balanced" and said that macro risks are getting overdone in the government securities (G-sec) market.

In its 6th and the last bi-monthly monetary policy review of the current fiscal, 2017-18, RBI kept interest rates unchanged for the third time in a row saying that higher government spending would accelerate inflation, and warned of risks from wider fiscal deficit.

Value-buying

After a steep correction lasting for seven sessions, investors may have been picking quality companies at lower levels, pulling the indices back in the green territory. Bhasin of IIFL believes market is under consolidation. Buying on dips is advisable. Bhasin likes the consumption theme and suggested to buy Nestle, Tata Global Beverages and Jubilant Foodworks. 

Strength in Nifty Bank

A strong momentum is seen in Nifty Bank as the weekly expiry of the index is due today. Nifty Bank reclaimed its crucial 26,000 mark, gaining 2 per cent to 26,126.40. Canara Bank (up 3.4 per cent), SBI (up 2.6 per cent), IDFC Bank (up 2.4 per cent) and PNB (up 2.3 per cent) rallied the most.

Good quarterly earnings

A slew of strong corporate results from Cipla, Cadila, SRF and Bharat Forge, among others, turned the sentiment positive in the market. Cipla surged as much as 6.85 per cent after the country’s fourth-largest drugmaker by revenue reported a 7 per cent jump in quarterly profit. Cadila and SRF were also trading higher, gaining up to 7 per cent on the back of solid earnings.

Gains in IT, pharma and realty stocks

IT stocks such as Infosys and TCS were trading strong, climbed over 3 per cent and 2 per cent, respectively, while pharma and realty stocks gained with the Nifty Pharma index and the Nifty Realty index climbing over 2.5 per cent each.