The rupee also gained on the back of Rajans announcements and went up to 65.5 against the dollar in intra-day trade from Wednesdays close of 67.07.
The index opened 290 points higher than Wednesdays close and gained as much as 550 points to the days high of 19,117.52 before settling at 18,979.76, a rise of 412.21 points, or 2.22%. The Sensex was at the highest level since August 14, when it closed at 19,367.59. On Wednesday, the Sensex had gained 333 points on investor optimism over the new RBI governor.
Rajan announced plans to revise and strengthen the monetary policy framework and liberalise the markets as well as curbs on investment and position-taking.
The banking sector index rose 9.3% after Rajan raised the overseas borrowing cap for banks and said there is a need to cut investments by lenders in government securities.