Mumbai: Joining a global rally, the benchmark Sensex surged by over 451 points, logging its best daily gain in a month, to close at 20,850.74  on the back of optimism over Chinese reforms and continued hopes of Fed sticking to its economic stimulus.

In step with local stocks, the rupee also jumped by over 60 paise to trade near 62.5 levels against the U.S. dollar. The rupee recovered as the RBI plans to inject 8,000 crore into the financial system via open market operations.

Brokers said investors shrugged off sentiments from foreign brokerage outfit UBS downgrading Indian equities to "neutral" from "overweight". Massive buying was seen in rate-sensitive capital goods, banking and realty shares. FMCG, oil & gas and power also saw fund-based purchasing, they added.

ITC, HDFC Bank and RIL drove the 30-share Sensex where 26 constituents ended the session in the green. L&T, HDFC, ICICI Bank, Infosys, HUL, ONGC, Hindalco and Bhel saw smart gains.

After gaining 205 points in the previous session, the Sensex shot up by 451.32 points, or 2.21 per cent, to end at nearly two-week high of 20,850.74. Additionally, this was the gauge's biggest single-day gain in terms of points since October 18 when it rose by 467.38 points.

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