Market benchmark Sensex jumped over 200 points in opening session on Wednesday led by gains in metal, auto, IT and energy stocks amid recovery in global equities.
The 30-share BSE index was trading 214.51 points or 0.52 per cent higher at 41,181.37.
Similarly, the broader NSE rose 71.35 points, or 0.59 per cent, to 12,127.
Tata Steel was the top gainer in the Sensex pack, rising over 2 per cent, followed by Infosys, M&M, Bharti Airtel, Maruti and Hero MotoCorp.
On the other hand, TCS and HDFC slipped in the red.
Besides recovery in global equities, domestic market rose on hopes of an economic revival in the upcoming budget, traders said.
Further, short-covering ahead of January derivatives expiry also lifted key indices, they added.
Bourses in Japan and South Korea were trading with sharp gains, while markets in Hong Kong opened with significant losses after a Lunar New Year break. Bourses in China remained closed.
Benchmarks on Wall Street too ended higher on Tuesday.
Brent crude oil futures rose 1.36 per cent to USD 59.61 per barrel.
In the previous session, Sensex settled 188.26 points, or 0.46 per cent, down at 40,966.86, and Nifty closed 63.20 points, or 0.52 per cent, down at 12,055.80.
Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 1,357.56 crore, while domestic institutional investors purchased shares worth Rs 711.70 crore on Tuesday, data available with stock exchanges showed.
The Indian rupee appreciated by 10 paise to 71.21 against the US dollar in early trade on Wednesday tracking gains in domestic equity market.
Forex traders said rupee is trading in a narrow range amid amid fast-spreading coronavirus outbreak in China stoking fears about more trouble for the global economy.
At the interbank foreign exchange the rupee opened at 71.23, than gained further ground and touched a high of 71.21 against the US dollar, registering a rise of 10 paise over its previous close.
On Tuesday, rupee had settled for the day at 71.31 against the US dollar.
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