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Domestic benchmarks snapped an eight-day losing streak on Wednesday, boosted by metal stocks on strong manufacturing activity data from top consumer China.
The Nifty 50 index rose 0.85 per cent to 17,450.90, while the S&P BSE Sensex closed 0.76 per cent higher to 59,411.08.
All the 13 major sectoral indexes advanced, with high weightage financials and information technology stocks adding 0.62 per cent and 1.46 per cent, respectively.
Metal index jumped nearly 4 per cent and was the top sectoral gainer, with 14 of the 15 constituents logging gains.
Data on Wednesday showed manufacturing activity in China expanded at the fastest pace in more than a decade in February, as production zoomed after Covid-19 restrictions were lifted late last year.
"The surge in China's manufacturing PMI indicates a rise in domestic consumption of commodities in the country, and is a major positive for the sector," Pallav Agarwal and Suman Kumar, analysts at Antique Stock Broking, wrote in a note.
Also read: PMI Manufacturing almost flat at 55.3 in February, job situation remains stagnant
Asian markets also advanced, with the MSCI's broadest index of Asia-Pacific shares outside Japan rising nearly 2 per cent.
The rise in Nifty 50 on Wednesday comes after a 4.1 per cent fall in the index over the last eight sessions amid persistent rate hike fears and sustained foreign selling.
Analysts cautioned that Wednesday's moves were likely temporary.
"An intermittent rally can certainly happen after the recent correction in the markets," said Anita Gandhi, director at Arihant Capital Markets, adding that for the gains to sustain, "clear triggers are needed".
Forty-five of the Nifty 50 constituents logged gains. Adani Enterprises and Hindalco were among the top Nifty 50 gainers.
Among individual stocks, Axis Bank advanced 2.49 per cent after the lender completed the deal to buy Citi's India consumer business.
On the flip side, Cipla fell 0.72 per cent on fears of a potential delay in the launch of asthma drug due to recent US drug regulator's observations on its Madhya Pradesh plant.
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