Equity benchmark Sensex rallied 477 points on Tuesday, tracking gains in index heavyweights Reliance Industries, Infosys and HDFC Bank amid a positive trend in global markets.
The 30-share index surged 477.24 points or 0.83 per cent to end at 57,897.48. Similarly, the Nifty rose by 147.20 points or 0.86 per cent to 17,233.45.
Asian Paints was the top gainer in the Sensex pack, rising nearly 3 per cent, followed by Sun Pharma, M&M, NTPC, UltraTech Cement and Titan.
On the other hand, IndusInd Bank and PowerGrid were the laggards.
The resilience of the US market (S&P 500 registered its 69th record high on Monday) and the spike in crude oil are indications that the Omicron variant, though surging, is unlikely to impact economic activity in any meaningful way, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a positive note. Stock exchanges in Europe were also largely trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude rose 0.61 per cent to $78.70 per barrel.
In another development, the rupee surged 34 paise to close at 74.66 (provisional) against the US dollar on Tuesday, tracking positive domestic equities amid a rising appetite for high-risk assets.
At the interbank forex market, the local unit opened at 74.95 against the greenback and witnessed an intra-day high of 74.60 and a low of 74.95.
In the previous session, the rupee appreciated 3 paise to 75 against the US dollar.
Positive moves in Indian equity indices and stronger Asian currencies aided sentiments, forex traders said, adding that trading is likely to remain range-bound this week ahead of the year-end holidays.
However, Omicron's worries and firm crude oil prices restricted the appreciation bias of the local unit to some extent.
On the domestic equity market front, the BSE Sensex ended 477.24 points or 0.83 per cent higher at 57,897.48, while the broader NSE Nifty advanced 147 points or 0.86 per cent to 17,233.25.
Meanwhile, the dollar index, which measures the greenback's strength against the basket of six currencies, fell 0.08 per cent to 96.02.
Brent crude futures, the global oil benchmark, rose 0.57 per cent to $79.05 per barrel.
Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 1,038.25 crore, as per stock exchange data.