REUTERS - India's stock markets extended gains from the previous session and were trading about 2 percent higher on Wednesday, heading towards their highest close in over a week, propped by buoyant global markets.
Asian shares extended a global rally on Wednesday, with markets in China stabilising and Japanese stocks posting their biggest one-day gain since the height of the global financial crisis in 2008.
However, some analysts felt the rally has been fuelled by bargain-hunting as investors bought beaten down stocks.
"This is a short-lived rally, global macro economic environment is not going to change in a day," Alex Mathews, head of research at Geojit BNP Paribas said.
"This rally will not sustain at higher levels, maybe 7,900 or 7,950 (on the NSE index) will be tested, tomorrow or day after we might see a selloff".
Indian stocks were also looking for cues from a cabinet meeting that took place on Wednesday where the government approved proposals of gold monetisation, offshore wind energy and telecom spectrum trading rules.
The 30-share Sensex was up 1.85 percent, while the broader Nifty was up 1.93 percent, heading towards their highest close since Aug. 31.
Financial stocks built on gains from the previous session, with Housing Development Finance Corp
Metal stocks also surged with Vedanta
Telecommunications stocks such as Bharti Airtel
(Reporting by Karen Rebelo in Mumbai; Editing by Anand Basu)
