Stock benchmark Sensex rose nearly 850 points at the open on Thursday after global stocks rose sharply after the US Federal Reserve hiked interest rates.
Also, fresh foreign capital inflows and falling crude oil prices helped domestic stocks, traders said.
The 30-piece Sensex traded 846.31 points, or 1.49%, higher to 57,662.96, and the broader Nifty was up 236.80 points, or 1.39%, to 17,212.15.
All components of the Sensex were in the green. HDFC was the top performer in the Sensex pack, up 3.14%, followed by Axis Bank, Asian Paints, Kotak Bank, IndusInd Bank, HDFC Bank, ICICI Bank and Bajaj Finance.
In the previous session, the 30-stock index rose 1,039.80 points, or 1.86%, to 56,816.65. Likewise, the broader NSE Nifty was up 312.35 points, or 1.87%, to 16,975.35.
Stock exchanges in Hong Kong, Seoul and Tokyo rallied on deals during the session, while Shanghai was in the red.
US stock markets ended the overnight session with sharp gains after the US Federal Reserve hiked interest rates for the first time since 2018. The Fed also indicated that more hikes were needed to fight inflation.
The US Federal Reserve approved a 0.25 percentage point rate hike on Wednesday.
International oil benchmark Brent rose 0.86% to $98.86 a barrel.
“The Fed’s 25 basis point rate hike was in line with market expectations. The Fed’s projections of another six rate hikes this year are hawkish, so the smart rally in the markets was somewhat unexpected with 2.24 percent and 3.17 percent gains from the S&P 500 and Nasdaq, respectively,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Mr Vijayakumar said the market was oversold and the resulting short covering had pushed indices higher. The market drew reassurance from Fed Chair Powel’s statement that “the US economy is very strong and well positioned to handle tighter monetary policy.”
He further noted that short covering in India will also lift markets on Thursday.
“FPIs turning to buyers after a long time and weakness in crude oil will support the market. There is upside in financials, particularly high quality private banks where FPIs have been consistent sellers,” he said.
Foreign institutional investors emerged as net buyers after buying £311.99 billion worth of shares on Wednesday, stock market data showed.
Meanwhile, Russian forces continued their attacks on Ukraine on Wednesday, although the two countries expressed optimism about efforts to negotiate a solution to end the conflict.