Sensex and Nifty, the two key equity benchmarks, rallied in early trade on Thursday tracking firm global market trends and continuous foreign fund inflows. The domestic indices were upbeat due to buying in IT counters which also added to the momentum.
After a firm beginning, the BSE Sensex gained 307 points to 63,406, while the broader NSE Nifty rose by 87 points to 18,845.
On the 30-share S&P BSE Sensex, TCS, Tech Mahindra, Infosys, HCL Technologies, Wipro, HDFC Bank, Larsen & Toubro, and HDFC were the major winners. On the flip side, Hindustan Unilever, Asian Paints, Mahindra & Mahindra, and NTPC were among the main losers.
In the broader markets, the BSE MidCap and SmallCap indices rose up to 0.7 per cent.
Sectorwise, the Nifty IT surged 2 per cent, followed by a 1 per cent gain in the Metal index. On the downside, Auto and FMCG pockets were the sole losers.
Among specific stocks, Vodafone Idea was down around 1 per cent after reports said the company has sought a loan of up to Rs 16,000 crore from SBI.
In the previous session on Wednesday, the 30-share barometer rallied 418 points (0.67 per cent) to settle at 63,100. The Nifty advanced 140 points (0.75 per cent) to end at record high of 18,758.
"Fed chief Jerome Powell’s observation that 'it makes sense to moderate the pace of rate hikes' has come as a shot in the arm for the bulls to take the ongoing rally forward," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The dip in the dollar index to 105.5 and the US 10-year bond yield declining sharply to 3.63 per cent are hugely favourable for continuation of FII inflows, Vijayakumar added.
"Strong global cues led by overnight surge in the US markets is expected to give local equities a major fillip in early trades on Thursday, after Fed Chair Powell hinted at a smaller rate hike in December. Adding to the optimism, FIIs showing renewed interest in Indian markets and lifting of curbs in several cities by the Chinese authorities could encourage investors to go long on equities in the near to medium term," said Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities Ltd.
Elsewhere in Asia, markets in Seoul, Tokyo, Shanghai, and Hong Kong were trading higher. Wall Street had ended significantly higher on Wednesday.
International oil benchmark Brent crude was trading 2.89 per cent higher at $85.43 per barrel.
Foreign Institutional Investors (FIIs) bought shares worth Rs 9,010.41 crore on Wednesday, as per exchange data.
Meanwhile, the rupee appreciated 32 paise to 80.98 against the US dollar in early trade on Thursday on a broad dollar weakness after Federal Reserve Chairman Jerome Powell said the pace of interest rate hikes may slow.
At the interbank foreign exchange, the domestic unit opened at 81.08 against the dollar, then gained further ground to touch 80.98, registering a rise of 32 paise over its previous close.
On Wednesday, the rupee rose by 42 paise to close at 81.30 against the US dollar, on month-end exporter dollar selling and MSCI rebalancing related inflows.