Bargain hunting, coupled with a dovish US Fed's monetary outlook and broad-based buying propelled Indian equity markets on Thursday, leading a barometer index to gain 248 points during the late-afternoon session on Thursday.
Initially, both the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers, as suspense cleared on the US Federal Reserve's move on a rate hike.
Investors breathed a sigh of relief, as the US Fed's Federal Open Market Committee (FOMC) on early Thursday, India time, raised key interest rates by only 25 basis points.
The interest rate rise was widely expected and factored-in by investors. A higher rate hike would have led to massive pull-back of foreign funds from emerging economies like India.
In addition, a dovish outlook by the US Fed which said that it will maintain an accommodative stand soothed investors nerves.
Besides, the FOMC projected an improved US economic outlook, lower unemployment and stable inflation.
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However, both the key indices ceded their initial gains as profit bookings subdued markets.
Furthermore, Finance Minister Arun Jaitley's comments that the GST (Goods and Services Tax) bill might get delayed due to parliament's logjam eroded investors confidence.
Nevertheless, value buying brought back investors.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was trading higher by 248 points.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made slight gains during the late-afternoon trade session. It was trading higher by 77.20 points or 1.00 percent at 7,828.10 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,596.63 points, was trading at 25,742.33 points (at 3.00 p.m.) -- up 247.96 points or 0.97 percent from the previous day's close at 25,494.37 points.
The Sensex has so far touched a high of 25,771.86 points and a low of 25,448.32 points during the intra-day trade.
On Wednesday, the Sensex gained by 174 points or 0.69 percent, while the Nifty rose by 50 points or 0.65 percent.
"Initially the markets rose on the back of positive bias after the US rate hike came on expected lines. However, profit bookings and finance minister comments subdued sentiments," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"However, value buying and clarity given by the FOMC decision lifted the markets again."
Vaibhav Agarwal, vice president and research head at Angel Broking said that markets gained some positive momentum after trading flat in the first half of the session led by strength in global markets.
"Markets have reacted positively to the rate hike as it is a sign of strength in the US economy and the rate hike finally reduces the uncertainty as to when the US Fed would act," Agarwal told IANS.
"With no significant domestic triggers and the uncertainty of the rate hikes behind us, we expect markets to consolidate at current levels."