Equity benchmark Sensex rallied nearly 500 points in early trade on Thursday, tracking a positive trend in global markets after the US monetary policy decision.
The 30-share index surged 494.12 points or 0.86 per cent to 58,282.15 in the opening trade. Similarly, the Nifty rose 122.15 points or 0.71 per cent to 17,343.55.
Infosys was the top gainer in the Sensex pack, rising over 2 per cent, followed by Bajaj Finance, HCL Tech, Tata Steel, Tech Mahindra and NTPC.
On the other hand, Maruti, Sun Pharma, HUL and ITC were among the laggards.
Last night, the US Federal Reserve said it would accelerate its pullback of economic stimulus and likely raise interest rates three times next year to tackle rising inflation.
"A hawkish Fed sending the markets higher is rare. But this happened on Wednesday in the US, since markets were positioned for a hawkish Fed, but hawkishness itself had positive market connotations," said VK Vijayakumar, Chief investment Strategist at Geojit Financial Services.
A larger taper and three rate hikes of 25 bps each in 2022 are negative from the market perspective, but the positive news is that the Fed expects inflation to cool off.
In India markets are positioned for volatility since the short-term texture of the market is sell on a rally, dictated by relentless FII selling. This trend may persist for a few more days, he added.
In the previous session, the 30-share equity benchmark slumped 329.06 points or 0.57 per cent to end at 57,788.03, and Nifty fell 103.50 points or 0.60 per cent to 17,221.40.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,407.04 crore on Wednesday, according to stock exchange data.
Elsewhere in Asia, bourses in Shanghai, Tokyo and Seoul were trading with gains in mid-session deals, while Hong Kong was in the red.
Stock exchanges on Wall Street ended on a positive note in the overnight session.
Meanwhile, international oil benchmark Brent crude rose 0.88 per cent to $74.53 per barrel.