"This is critical for India under current circumstances when the domestic economy is undergoing a healing process. Some additional support in the form of global liquidity would augment this recovery process," said Chaudhuri.

"We are confident in 6-8 months the Indian economic fundamentals would be strong enough to withstand any major outflow of FII money in the wake of rising short term rates in the U.S.”

The S&P BSE automobile index rocketed 474.62 points, followed by capital goods index which soared 424.92 points, bankex gained 358.20 points, consumer durables index moved up by 293.90 points and healthcare index rose by 240.98 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) too made healthy gains. It rose 139.25 points or 1.75 percent at 8,114.75 points.

Major BSE gainers were Unitech, up 12.85 percent at 25.90; HDIL, up 9.24 percent at 93.40; India Hotels, up 9.13 percent at 101.60; Adani Power, up 7.62 percent at 52.95; and Ashok Leyland, up 5.80 percent at 41.05.

Major Sensex gainers included Hero MotoCorp, up 5.57 percent at 2,998.15; HDFC, up 3.73 percent at 1,055.65; Tata Motors, up 3.70 percent at 525.60; Larsen and Toubro (L&T), up at 3.57 percent at 1,574.90; and BHEL, up 3.51 percent at 228.45.

However, Infosys, down 1.08 percent at 3,699.90, and Hindustan Unilever, down 0.58 percent at 750.50, lost ground.

In Asian markets, Nikkei gained 1.13 percent and China's Shanghai Composite gained 0.35 percent. However, Hong Kong's Hang Seng closed 0.85 percent lower.

In Europe, London's FTSE 100 increased by 0.44 percent, Germany's DAX Index was up 0.96 percent, and France's CAC 40 was higher by 0.62 percent.