Markets rose for a third straight session in early trade on Wednesday, outperforming regional peers as investors continued to scoop up beaten-down financial and technology stocks after a recent selloff.
The Nifty was up 0.69% at around 16,371 in early trade and Sensex rose 0.41% to 54,540. The indices have made strong gains this week after posting five straight weekly losses.
"The market appears to be bouncing back in the last two days from an over-sold condition and on the back of reversal in global markets, as well as cooling off on the dollar because it had already run up quite a bit," said Rohit Srivastava, founder and market strategist at Indiacharts.
The dollar on Wednesday moved further away from a two-decade high notched earlier this week, easing some of the pressure on the rupee which has recently slumped to record lows.
On the benchmark Nifty, 41 of the 50 stocks were in the positive territory, with Bajaj Finance and Infosys leading the pack with gains of 1.07% and 1.27%, respectively. Bajaj Auto and Axis Bank were also among the top gainers, rising 2% each.
The Nifty IT index advanced the most among sub-indices with a jump of 1.2%, while Nifty Metal was up 0.4%, extending a 1-year high, hit in the previous session.
Cigarettes-to-hotel conglomerate ITC was down 0.08%, while airline operator InterGlobe Aviation Ltd gained 3.6% ahead of their quarterly earnings.
The strong gains in the Indian market contrasted with broader Asian peers, which struggled to carry recent momentum amid worries about surging inflation and the impact of rising interest rates on global economic growth.
Federal Reserve Chair Jerome Powell on Tuesday pledged the US central bank would ratchet interest rates as high as needed to kill a surge in inflation.