Mumbai, Jan 29 : Indian equity markets rose sharply on Monday on the back of great expectations from the upcoming interim budget (Feb 1) and strong cue from other Asian markets, said Manish Jain, Head of Fund Management at Centrum.

While Sensex ended the day 1,240.90 points or 1.76 per cent higher at 71,941.57, Nifty closed 385 points or 1.8 per cent higher at 21,737.60.

Private sector banks in particular drove the market rally as DII's continue value picking at current levels.

"We believe that the volatility will continue in the coming days as the results season unfolds. The market will also be keenly looking at the upcoming US Fed meet to see any change in body language, inflation expectations and rate cut cues," Jain said.

The domestic market underwent an upturn as the recent selloff and positive Asian peers provided an opportunity to accumulate quality stocks, said Vinod Nair, Head of Research at Geojit Financial Services.