Yields on the benchmark 10-year paper tumbled below the 6-per-cent threshold even as stocks staged a smart rally, buoyed by measures announced by the RBI to ease the stress in various sectors of the economy.

The yield on the 10-year G-Sec closed lower at 5.97 per cent against Tuesday’s close of 6.01 per cent after RBI governor Shaktikanta Das surprised the bond markets by announcing the second tranche of the G-SAP auction of Rs 35,000 crore on May 20.

The bellwether Sensex closed with a gain of 424.04 points, or 0.88 per cent, at 48677.55 as investors loaded up on banking, pharmaceuticals and IT stocks. It had touched a high of 48742.72 soon after the announcement.

Broking circles said bank stocks gained as the central bank did not grant a blanket moratorium.

Pharma stocks spiralled upwards as the RBI opened a Rs 50,000-crore liquidity window to provide credit at an attractive rate to critical health infrastructure and service providers.

The broader NSE Nifty surged 121.35 points, or 0.84 per cent, to 14617.85.

Sun Pharma was the top gainer in the Sensex pack, soaring 5.94 per cent, followed by Kotak Bank, Axis Bank, IndusInd Bank, ICICI Bank, Dr Reddy’s, Titan and TCS.

Only three index stocks closed in the red — Bajaj Finance, Asian Paints and Hindustan Unilever — which fell up to 1.75 per cent.

“Pharma gained the most as relief measures announced by the RBI involved provision of term liquidity facility of

Rs 50,000 crore on priority basis for the healthcare sector. Apart from this, the announcements included a resolution framework 2.0 for individuals, small businesses and MSMEs, which lifted the banking stock,” said Siddhartha Khemka, head-retail research at Motilal Oswal Financial Services.

Meanwhile, the rupee closed 6 paise lower at 73.91 against the US dollar because of outflows and a stronger greenback in the overseas markets.