Stocks recovered from the bruises inflicted by the Israel-Palestine conflict as dovish statements from two Federal Reserve officials and spirited buying in real estate, auto and financial shares amid the festive cheer saw the benchmark indices rallying nearly 1 per cent on Tuesday.

While the Sensex shot up nearly 567 points to close at 66079.36, the Nifty gained 177.50 points or 0.91 per cent to close at 19689.85.

The revival came from positive global cues emerging from the statements of two US Federal Reserve officials that indicated interest rates may be left unchanged at its next meeting at the end of this month.

Both of them indicated that the costlier borrowing costs due to the hardening of US treasury yields may prevent further rate increases by the Fed.

Since March 2022, the US central bank has raised interest rates on 11 occasions to overcome inflation.

Their comments led to Tokyo's Nikkei 225 gaining 2.4 per cent, Hang Seng rising 0.8 per cent, and the S&P/ASX 200 in Australia finishing up 1 per cent.

In Europe, Germany's DAX jumped 1.6 per cent, the CAC 40 in Paris by 1.4 per cent and Britain's FTSE 100 rose 1.5 per cent.

Wall Street's main indexes opened higher on Tuesday as US Treasury yields retreated following the dovish comments from Federal Reserve policymakers, though caution prevailed amid escalating tensions in West Asia.

The Dow Jones Industrial Average rose 78.76 points, or 0.23 per cent, at the open to 33683.41.

The S&P 500 opened higher by 4.09 points, or 0.09 per cent, at 4339.75, while the Nasdaq Composite gained 21.57 points, or 0.16 per cent, to 13505.81 at the opening bell.

Domestically, the festive cheer drew investors to real estate and auto stocks.

The realty sector hogged the limelight with the Nifty Realty index rising 4 per cent to hit a 15-year high, led by Prestige Estates Projects, Sobha Developers, Godrej Properties and DLF among others.

``Domestic equities witnessed a relief rally on Tuesday after the previous session’s selloff, as the sentiments turned positive globally and the US bond yields cooled off. The global markets shed the concern over the conflict between Israel-Palestine and witnessed healthy recovery," Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services, said.

The 10-year US treasury yield was trading close to 4.70 per cent levels against the previous close of 4.78 per cent while Brent crude was trading lower at $87.85 a barrel against $88.15,previously.