Following a strong gain in US markets and purchasing in index heavyweight Infosys, equity benchmarks rebounded dramatically in early trade on Thursday, with the Sensex surging 651 points.

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The 30-share BSE benchmark was up 650.9 points to 56,319.93. The NSE Nifty increased by 185.65 points to 16,863.25.

Tech Mahindra, Tata Steel, Infosys, State Bank of India, Kotak Mahindra Bank, and M&M led the Sensex pack in early trade.  Nestle and Titan, on the other hand, were laggards.

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Hong Kong markets were quoted higher. In the overnight trading on Wednesday, stock markets in the United States rose higher.

The Federal Reserve stepped up its fight against the worst inflation in 40 years on Wednesday, boosting its benchmark short-term interest rate by half a percentage point.

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“US equities rallied, recording the biggest one-day gain since 2020 after Federal Reserve comments suggested that the central bank is unlikely to consider a higher interest-rate hike of 75 basis points in the coming months”, said Mitul Shah, Head of Research at Reliance Securities.

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“Moreover, rate hike and balance sheet unwinding quantum were on expected line without any negative surprise, which was already factored in market correction over past few days. It was like a relief rally to some extent,” he added.

Meanwhile, domestic stock markets tumbled dramatically on Wednesday as the Reserve Bank of India unexpectedly raised the benchmark lending rate to 4.40% in order to manage inflation.

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The BSE index was down 1,306.96 points, or 2.29%, to 55,669.03, while the Nifty fell 391.50 points, or 2.29%, to 16,677.60 in the previous session.

According to stock exchange statistics, foreign institutional investors sold shares worth Rs 3,288.18 crore on Wednesday.

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Meanwhile, Brent crude, the international oil benchmark, rose 0.48% to USD 110.67 a barrel. The rupee rose 29 paise to 76.11 against the US dollar in early trade on Thursday, as the US currency fell in the international market.