Mumbai, Jun 23 (IANS): The Indian stock market surged on Tuesday tracking a positive trend in the global markets, with the BSE Sensex gaining over 500 points.

The Nifty50 on the National Stock Exchange (NSE) also added over 150 points to close above the 10,400 mark.

Healthy buying was witnessed across sectors led by finance and banking stocks. The S&P Banking index closed 2.50 per cent higher while the Finance index rose 2.08 per cent.

Net buying by foreign portfolio investors stood at Rs 168.96 crore during the day and that by domestic institutional investors was Rs 454.48 crore.

Rahul Sharma, Research Head at Equity99 Advisors, said that along with the positive sentiments, traders were seen covering up short positions ahead of derivative expiry on Thursday.

"Today's rally was led by hectic buying in private sector banks and NBFC stocks," he said.

He said that the market is likely to remain volatile with an upward bias as the economy gradually unlocks and is expected to post a sharp recovery.

The BSE Sensex closed at 35,430.43, higher by 519.11 points or 1.49 per cent from the previous close of 34,911.32.

It had opened at 35,015.73 and touched an intra-day high of 35,482.16 and a low of 34,843.69 points.

The Nifty50 closed at 10,471.00, higher by 159.80 points or 1.55 per cent from its previous close.

The top gainers on the Sensex were Larsen & Toubro, Bajaj Finance and IndusInd Bank, while the only losers were Reliance Industries, Bharti Airtel and Maruti Suzuki India.