At 13:04 hours IST - the benchmark indices extended the rally, as rate sensitives, technology, telecom and metal were witnessing huge buying interest. The broader indices were also in the limelight; up 2% each, as about 982 shares advanced while 219 shares declined on the NSE.

The Nifty tested the 4350 level; it was up 119 points, to 4,350.2. The Sensex rose 403 points, to 14,653. On the global front, European markets were up 0.5-0.9%.

In an exclusive interview with CNBC-TV18, Matthews said he expected India to grow at 7% next year and added that he was not too alarmed by the country’s state of fiscal deficit. “I was not disappointed by the budget,” he said, adding that we would shift money to India from China where he saw asset bubbles forming."

On the sectoral front, Auto and IT indices were up 4% each. TECk, Bank, Realty, Metal, Capital Goods and Power indices gained 2-3.9%.

Top gainers - Tata Motors was at Rs 315, up 6.35%; M&M was at Rs 764, up 6.04%; ICICI Bank was at Rs 730.50, up 5.10%; Bharti Airtel was at Rs 825.50, up 5.09%; TCS was at Rs 440.50, up 4.77%; Siemens was at Rs 450.30, up 6.32%; HCL Tech was at Rs 205.05, up 5.56% and Axis Bank was at Rs 841.50, up 5.37%.

Top losers - Sun Pharma was at Rs 1,212, down 0.39%; HUL was at Rs 265.95, down 0.32%; Sterlite Industries was at Rs 588.30, down 0.31% and Ambuja Cements was at Rs 97.50, down 0.31%.

In the midcap space, Exide Industries, Deccan Chronicle, Bombay Rayon, Petronet LNG and Fortis Health were up 7-9.5%.

In the smallcap space, Himadri Chemical, Ahluwalia, Eveready Industries, Madhucon Projects and Premier gained 11-19%. However, Money Matters, NIIT Tech, Advani Hotels, Modern India and JK Paper lost 4-10%.

On the next page - see how Indian markets performed in the last couple of hours