Stocks posted their best gains in nearly three weeks on Tuesday as a serious bout of short covering and late buying by traders prompted the benchmark index to close above an important support level. Indian shares were the best performers across Asia and Europe.

Traders started the session on the front foot as the last week of the monthly expiry of derivatives contracts meant that most short positions accumulated in the past fortnight had either to be squared off or shifted to the next month before Thursday. That melee resulted in pent up buying in front line stocks and sustained short covering across the board. The Nifty had been falling for 9 of the previous 11 sessions, sinking to a 7-month low on the charts.

Meanwhile, here are the major events of the trading day:

* The Nifty posts its best gain since December 8. Index surges 125 points, or 1.6 per cent, to 8,032 points, ending just a shade below the day's high of 8,044 points.

* Such was the ferocity of buying that 47 shares rose on the Nifty compared with just 4 that fell.

* Bosch, ITC, Eicher Motor, Lupin, Tata Steel and Aurobindo Pharma gained between 2.1-2.8 per cent.

* GAIL, Hero Motor, IndusInd Bank, Idea Cellular and Tata Power dropped 0.5-1.3 per cent on the Nifty.

* The Sensex soared 406 points to 26,213 points on the Bombay Stock Exchange. All 30 shares rose on the index. ITC was the top gainer. Reliance Industries was the top traded share.

* Bharat Financial, Divi's Labs, Reliance Industries, ITC and Bajaj Finance were the top traded shares by value.

* DLF, IDFC Bank, and Reliance Communications were among the top traded stocks by volume.

* Buying deepened its presence across the market with broader benchmarks surging 1.5-1.6 per cent. Midcaps were in heavy demand with their index gaining 1.9 per cent.

* All sectoral indices surged smartly with the top gains reserved for Metals, Pharma, FMCG, Auto and Banking shares.

* Bulls ran amok on Dalal Street where 1,705 shares rose versus 860 that fell.

* The trend was even more bullish in the derivatives market where 168 futures jumped compared to 8 that dropped.