Markets jumped to their highest in 12 weeks on Thursday, lifted by a surge in non-bank lender Bajaj Finance after its earnings blew past estimates, while a US Federal Reserve rate hike on expected lines soothed investor nerves.
Nifty was up 1.2% at around 16,850, in early trade, while Sensex rose 1.33% to around 55,560, both touching their highest level since May 5, ahead of another batch of blue-chip earnings reports.
The Fed's 75 basis point hike in interest rates and Chair Jerome Powell's comments dismissing chances of a recession offered some relief to investors who had been on the sidelines this week ahead of the policy meeting.
"We've taken on strong global cues after the Fed moved on expected lines. The Fed's commentary that it would only move on large hikes in the future if data warrants it has further improved sentiment," said Gaurav Dua, head of capital market strategy at Sharekhan.
ICICI Securities raised its target for the Nifty to 17,500 from 16,600 for the coming months on structural improvement, with crude and industrial commodities prices falling sharply and India's Volatility Index cooling.
Bajaj Finance soared 9.4% in its biggest intraday percentage jump since November 2020, topping gains on the Nifty 50, after the non-bank lender reported stronger-than-expected first-quarter results.
Bajaj Finance's holding company, Bajaj Finserv, which is also expected to report results, decide on a bonus share issue and a stock split on Thursday, jumped 8.2%.
Nifty Financial Services index advanced 1.9% to a 15-week high.
Meanwhile, auto heavyweight Tata Motors slid 3.8% in its sharpest intraday drop in over six weeks after reporting a bigger loss on a jump in costs.
SpiceJet dived 9.3% to a March 2020 low after India's aviation regulator on Wednesday halved the budget carrier's capacity citing recent safety snags.
Nifty components Dr Reddy's Laboratories, Nestle India and SBI Life Insurance are scheduled to report results later in the day.