Equity benchmark Sensex rallied over 700 points in early trade on Wednesday, tracking gains in index majors Infosys, Reliance Industries and ICICI Bank ahead of the Reserve Bank of India's monetary policy outcome.

According to experts, markets bulls are enthused by a positive sentiment in global markets after top US public health expert Dr Antony Fauci observed that the Omicron variant is unlikely to be more severe than the Delta variant, removing market concern regarding the economic impact of the new variant.

The 30-share index was trading 729.05 points or 1.26 per cent higher at 58,362.70 in initial deals. Similarly, the Nifty rose 202.15 points or 1.18 per cent to 17,378.85.

HCL Tech was the top gainer in the Sensex pack, rising over 2 per cent, followed by Infosys, Bharti Airtel, Tech Mahindra, L&T, Reliance Industries and ICICI Bank.

On the other hand, NTPC was the sole laggard.

In the previous session, the 30-share equity benchmark ended 886.51 points or 1.56 per cent higher at 57,633.65, and Nifty rallied 264.45 points or 1.56 per cent to 17,176.70.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,584.97 crore on Tuesday, as per exchange data.

The Reserve Bank of India is scheduled to announce the outcome of its bi-monthly Monetary Policy Review at 1000 hours.

The RBI's policy announcement is unlikely to be market-moving since the Monetary Policy Committee (MPC) is likely to retain the status quo on policy stance and rates, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

A 10 per cent correction from the peak in a raging bull market provides good buying opportunities, particularly when the global equity backdrop is 'risk-on.' This favourable setting continues with the strong rally in the US market yesterday, he stated.

However, he noted that since FIIs continue to be in the sell mode, markets may come under selling pressure at higher levels.

Elsewhere in Asia, bourses in Shanghai, Seoul and Tokyo were trading with significant gains in mid-session deals, while Hong Kong was in the red.

Stock exchanges in the US too rallied in the overnight session.

Meanwhile, international oil benchmark Brent crude fell 0.42 per cent to USD 75.12 per barrel.