The benchmark Sensex jumped 433 points, or 2.7 percent, to close at 16,454 , while the Nifty closed 133 points higher at 4,997 after leaping past 5,000 during the day. The Sensex's gain was the index's biggest daily percentage gain since 3 January.

Brokers said besides recovery in the rupee, a firming trend on the Asian boures after finance ministers and central bank governors from the world's leading economies pledged to give support to Europe's financial crisis, buoyed the trading sentiments.