Indian equity benchmarks rose on Wednesday and extended their rally for the fourth straight day, taking cues from gains in Asian peers and on Wall Street as corporate profits helped boost optimism and a fall in oil prices driven by increasing US supply helped sentiment further.
The 30-share Sensex index rose 382.43 points to 59,343.03 in early trade, and the broader NSE Nifty-50 index advanced 98.45 points to 17,585.40.
Equity benchmarks surged on Tuesday, with the Sensex index jumping 549.62 points to end at 58,960.60, and the broader NSE Nifty-50 index climbing 175.15 points to close at 17,486.95.
Even while foreign investors sold shares in the previous session, domestic investors continued to pour money into the stock market, which boosted optimism.
Asia Pacific stocks fluctuated, with Hong Kong stocks dipping while those in Japan and South Korea rose.
"Global stocks remain cheerful for the past two sessions as strong US corporate earnings results and a U-turn in the UK's fiscal plan led to a revival in risk appetite in global financial markets," said Amit Pabari, Managing Director of CR Forex Advisors.
Overnight, US stocks rose, driven by better-than-anticipated quarterly reports from Goldman Sachs Group, Johnson & Johnson, and Lockheed Martin. The Dow Jones and S&P 500 both increased by 1 per cent.
According to US market futures, the S&P 500 index was set to continue its recent recovery as strong factory output data increased the country's risk assets' value.
"While shares have found technical support in recent days and could bounce further...the near-term downside risks for shares remain high," Shane Oliver, Chief Economist at AMP Capital, told Reuters.
Chris Turner, Global Head of Markets at ING, told Reuters that a quiet week for US data could also see the dollar correction extend slightly.
"But a core view of not just the Fed, but other central banks hiking into a looming recession should mean that the core dollar bull trend remains intact," he said.
But upbeat corporate performance, lower valuations, and UK policy U-turn have all boosted risk taking.
On Tuesday global stocks were also boosted by a fall in oil prices driven by worries about a rise in American supply, a slowing global economy, and a decline in Chinese fuel demand.
Still, the full collapse in confidence toward stocks and global growth among fund managers polled by Bank of America paves the way for an equity bottom in the first half of 2023.
Despite the optimism, Terry Sandven, Chief Equity Strategist at US Bank Wealth Management, warned that challenges remain, according to Bloomberg.
“Analysts' consensus earnings projections remain subject to downward revision,” he wrote in a note.
“Inflationary trends, hawkish Fed commentary, and a slower earnings growth pace in 2023 are key contributors weighing on investor sentiment and equity prices,” added Mr Sandven.