Indian benchmark indices staged a sharp recovery in early Wednesday trade, reversing the previous session's declines.
The BSE Sensex climbed 553 points to 77,603.57, while the Nifty 50 added 148.15 points.
The rebound was primarily driven by strength in the banking sector, which helped offset broader market caution.
The rally coincided with softer-than-expected US inflation data, which eased concerns about prolonged tight monetary policy in the United States.
This macro tailwind provided immediate relief to risk assets in emerging markets, including Indian equities, which had faced pressure from global rate expectations.
Market participants are closely watching the sustainability of this recovery.