New Delhi: Domestic equity benchmark Sensex rallied over 1,265 points on Thursday, led by robust buying in auto, financial and IT stocks amid hopes of a second stimulus package from the government to mitigate the blow of the Covid-19 lockdown.

After hitting a high of 31,225.20 during the day, the 30-share BSE barometer ended 1,265.66 points or 4.23 per cent higher at 31,159.62. Likewise,  the NSE Nifty soared 363.15 points, or 4.15 per cent, to 9,111.90.

Indian stocks opened on a positive note tracking global peers on Thursday. In early morning trade Sensex went up 850 points, or 2.86 per cent, at 30,750 and the Nifty50 index touched 9,000, a rise of 265 points, or 3 per cent.

Mahindra and Mahindra was the top gainer in the Sensex pack, surging over 16 per cent, followed by Maruti, Titan, Bajaj Finance, HDFC, Bajaj Auto and Hero MotoCorp.

On the other hand, HUL, Tech Mahindra, IndusInd Bank and Nestle were the laggards.

"Indian markets started trading on a positive note taking upbeat cues from its Asian peers in the morning session as policymakers discussed the process of reopening the global economy as data showed a slowing spread of Covid-19," said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi told news agency PTI.

During the afternoon session, market further strengthened on back of expectations of second stimulus package estimated at around Rs 1 lakh crore and focus on helping small and medium businesses, which led to both broad-based buying and also triggered some short covering, he added.

The stock market rallied on Wednesday but didn’t keep up the pace because of the uncertainties related to the lifting of the lockdown. Investors were edgy as there was no clarity on the extension of the 21-day nationwide lockdown expected to be on April 14.

Even the increase in the number of positive Covid 19 cases kept the investors anxious impacting the investments. The benchmark indices witnessed a rally during the day but ended lower because of volatility.

Sensex slipped 173.25 points, or 0.58 per cent, to 29,893.96 while the  Nifty dipped 0.49 per cent to 8,748.75 points.

Meanwhile US stocks rallied with the Dow ending session at a high of 780 points amid hopes that the number of Covid 19 cases have stabilised.

On Wednesday, the Dow Jones Industrial Average jumped 779.71 points, or 3.44 per cent, to 23,433.57. The S&P 500 rose 90.57 points, or 3.41 per cent, to 2,749.98. The Nasdaq Composite Index increased 203.64 points, or 2.58 per cent, to 8,090.90, according to Xinhua news agency.

The primary S&P 500 sectors ended higher, with real estate and energy up 7.41 per cent and 6.74 per cent, respectively, beating others among the 11 stocks.

Sentiment remains volatile, but investors stay hopeful about a potential slowdown in the growth of novel coronavirus cases, experts noted.

(With input from agency)