Equity benchmarks extended gains in afternoon, with the Sensex rising 429.74 points or 1.32 percent to 33,037.08 and the Nifty climbing 88.30 points to 10,296.

The volatility increased a bit during the day ahead of expiry of October derivative contracts on Thursday.

Nifty Bank rallied 750 points, largely backed by PSU banks after mega recapitalisation plan of Rs 2.11 lakh crore that will be spread over two fiscal years.

The broader markets continued to underperform benchmarks as the BSE Midcap and Smallcap indices were flat due to weak market breadth. About three shares declined for every two shares rising on the BSE.