Equity benchmark Sensex jumped over 200 points in early trade on Tuesday led by gains in index majors TCS, Maruti and Bajaj Finance amid a largely positive trend in global markets.
The 30-share index was trading 228.13 points or 0.38% higher at 60,366.59 in initial deals. Similarly, the Nifty rose 73.50 points or 0.41% to 18,003.15.
NTPC was the top gainer in the Sensex pack, rising around 3%, followed by Maruti, PowerGrid, Bajaj Finance, Bajaj Finserv, HUL and Titan.
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On the other hand, Sun Pharma, IndusInd Bank, Tech Mahindra, Tata Steel and Kotak Bank were among the laggards.
In the previous session, the 30-share index ended 831.53 points or 1.40% higher at 60,138.46, and Nifty rose 258 points or 1.46% to 17,929.65.
Foreign institutional investors (FIIs) were net sellers in the capital market, as they offloaded shares worth ₹202.13 crore on Monday, as per exchange data.
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"The 258-point surge in Nifty on Monday, despite massive sustained selling by FIIs for several days, has again proved that FII selling can impact the market only in the short run," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Retail and DII enthusiasm is getting fundamental support from positive economic data like record GST collections (₹1.3 lakh crore in October), PMI at 55.9 in October and better-than-expected Q2 results, he stated.
Further, an important event that can influence financial markets globally is the Federal Open Market Committee (FOMC) meeting starting later in the day.
"The Fed is widely expected to announce tapering its bond buying program starting this month. More important than the tapering announcement, which is already discounted by markets, will be the Fed's response to inflation and the likely cues on rate hikes.”
"If indications of an earlier-than-expected rate hike come from the FOMC meeting, that can be negative for markets. Otherwise, markets may continue to be resilient," Mr. Vijayakumar said.
Elsewhere in Asia, bourses in Shanghai and Tokyo were trading with losses in mid-session deals, while Hong Kong and Seoul were positive.
Stock exchanges in the U.S. also ended with gains in the overnight session.
Meanwhile, international oil benchmark Brent crude rose 0.15% to $84.84 per barrel.