The euphoria was such that HSBCs downgrade of Indian stocks to underweight from neutral and dismal July IIP numbers had little impact on the market.
Market experts attributed the positive sentiment to the developments in Europe, where a German court gave the nod for a permanent euro-area rescue fund. However, the court has stipulated that Germany ought to set a cap of about 190 billion euros on its liabilities before the ratification.
There is widespread speculation that the US Federal Reserve will boost stimulus measures during its two-day policy meeting. The bond-buying programme might bring back liquidity in the global markets. There are expectations of some kind of easing by the US Fed tomorrow, said Andrew Holland, CEO, institutional equities, Ambit Capital.
All Asian and European stocks rose on Wednesday, with the the Nikkei 225 index rising the most at 1.56% among Asian stocks.
Back home, FIIs bought shares worth about R451 crore, taking purchases so far this year beyond $12 billion. Purchases in the August-September period alone totaled $2 billion. According to Holland, FIIs will continue to invest if the government initiates much-needed policy reforms.
On Wednesday, the BSE Sensex rose 147 points or 0.82% to close at 18,000.03 points while the broader 50-share NSE Nifty was up 41 points or 0.76% at 5,431.