New Delhi, Dec. 5 -- After a period of volatility, optimism returned to the Indian stock market, boosted by the RBI's repo rate cut, which triggered a sharp rally in rate-sensitive stocks and helped key indices close above important levels.

The Nifty 50 gained 0.59%, closing above the 26,000 mark at 26,188, while the S&P BSE Sensex surged 0.54% to 85,723. The broader markets, however, were mixed, with the Nifty Midcap 100 index rising 0.53% and the Nifty Smallcap 100 index falling 0.54%.

Sector-wise, all major indices closed higher, led by the Nifty PSU Bank, which rebounded sharply by 1.55%, followed by Nifty IT, Nifty Metal, and Nifty Auto, each rallying between 0.66% and 1%. The Nifty Realty and Nifty Chemicals indices also closed hi...