The BSE Sensex rose over 1% Wednesday, tracking strong gains in Asia and the rupee. At 09.20 a.m., it traded 178 points higher at 16,198, while the broader Nifty index advanced 55 points to 4,918.
Asian stocks traded higher for a second straight day, with markets in Japan rising over 1.5%. The rupee gained 18 paise and traded at 55.46 against the US dollar.
Indian markets have been moving down over the last two months, and every up move has been used as an opportunity to short stocks. Analysts say these upsides are pullbacks or bounces and the overall trend remains negative.
"Positive moves can come in till 5,050 but don't expect markets to go above these levels... Markets are likely to be in a 200 point range," Somil Mehta, senior technical analyst at Sharekhan told NDTV Profit.
Banking stocks (1.5%) led the gains for a third straight day. India's economic growth has slowed to a nine-quarter low and investors are hopeful of a rate cut later this month. PSU lender Bank of Baroda (2.15%) was the top Nifty gainer.
48 of the 50 stocks traded in the green. Commodity stocks like Tata Steel (2.1%) and Sesa Goa (1.9%) also saw buying interest. Oil refiner BPCL (-0.53%) and drug maker Dr Reddy's were the only stocks trading lower on the Nifty.
The market breadth was strong with over 87% stocks rising on the broader BSE 500 index.
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