The BSE Sensex advanced 5.2% or 864.13 to 17,594.07. The CNX S&P Nifty surged 6.2% or 304.10 at 5,203.40.

Of the BSE share, 1,401 stocks lost, 1,302 advanced and 23 shares remained unchanged.

Stocks in the 30-stock Sensex index shares surged.

Turnover on the BSE was at 7,099 crore rupees while the National Stock Exchange posted turnover of 19,267 crore rupees.

Reliance Natural Resources led the most active stocks on the BSE trading with turnover of 465.92 crore rupees followed by Reliance Petroleum,, Reliance Industries, ICICI Bank, and Reliance Energy.

Trade Minister Kamal Nath said on Wednesday that there is no economy in the world that can be fully insulated from a recession in the U.S., but India will have a limited impact. Kamal Nath was speaking at a gathering of business leaders during the annual World Economic Forum in Davos, Switzerland.

He added that domestic demand has been driving India's recent growth.

Of the BSE shares, Reliance Energy surged 16.8% to 2,004 rupees. It led the advancers in the Sensex index.

Reliance Energy announced that it had won a railway project worth 2,500 crore rupees from the Delhi Metro Rail Corporation, in consortium with Spain's CAF.

Reliance Industries surged 8.5% to 2,558 rupees.

National Thermal Power Corporation climbed 13.3% to 222.75 rupees on news reports that the company is intending to invest 1,729 crore rupees for development of the Jharkhand coal mine.

Satyam Computers gained 10.3% to 391 rupees, TCS advanced 7.5% to 859 rupees, Infosys surged 2.9% to 1417 rupees while Wipro galloped 1.4% to 435 rupees.

Banking and financial shares surged on hopes of a rate cut from the Reserve Bank of India following rate cuts in the U.S. and Hong Kong.

Housing Development Finance Company climbed 3.2% to 2,560 rupees. ICICI Bank, gained 4.9% to 1179.7 rupees, and State Bank of India 8.6% to 2,344 rupees.

HDFC Bank jumped 6.8% to 1,538 rupees. On Monday, HDFC Bank reported 45.2% rise in net profit to 429.36 rupees on 59.7% rise in total income to 3,405.79 crore rupees during the third quarter of December 2007 over the third quarter of 2006.

Grasim Industries rose 4.8% to 2,996 rupees. The company during trading hours on Tuesday reported 34.6% rise in net profit to 553.79 crore rupees on 15.9% rise in total income to 2,694.96 crore rupees during the December 2007 third quarter over December 2006 third quarter.

Tata Motors rose 1.8% to 669.80 rupees on reports that the company has signed a development contract with Chrysler LLC for developing electric vehicles.

6:00AM New York, 6:00PM Hong Kong - Hong Kong stock index surged 10% in record one day rise. Analysts predicted that the rally may falter in the weeks ahead.

Hong Kong stock indexes soared on record one-day rise led by financial and realty stocks after the U.S. Federal Reserve slashed its benchmark interest rate. The magnitude of the rate cut surprised the market. The sharp rise in the market averages may not sustain in the coming weeks if the U.S. economy continues to weaken.

In Hong Kong trading Hang Seng Index climbed from a two-day 14% decline to close up 11% or 2,332.54 to 24,090.17, the steepest ascent since 1998, while the Hang Seng China Enterprises Index rose 11% or 1,367.62 to 13,279.53, the most since September 1998.