The market rally extended for a third straight day led by a continued optimism as investors cheered the moderation in monetary tightening by the Federal Reserve, whereas soft US payroll data aided sentiments.

The domestic benchmarks closed at the highest value in two weeks, with Sensex gaining about 595 points, or 0.92%, to 64,958.69. Intraday, the index climbed as much as 628 points. The 50 stocks compiled index Nifty 50 rose 181 points, or 0.94%, to close the day at 19,411.75. The index rose as much as 192 points, or 1%, on an intraday basis.

Globally, the biggest challenge, he added, was the rising US Treasury yields which are now being managed as inflation has cooled down, which prompted Feds to hold rates. US 10-year government bond yields have cooled down to 4.59% today, from 4.74% last Wednesday after Fed’s decision.

“This could lead up to a rally, and there could be a good run-up across the globe because of the U.S., which we have already started seeing over the last 2-3 days,” he added.

The bull rally was driven by gains in capital goods, metals and industrials sectors aided by softening of commodity prices. BSE Capital Goods was up 1.68%, BSE Metal gained 1.64% and BSE Industrials rose 1.42%. “Since most of the headwinds are global in nature, investor sentiment has shifted to domestic-oriented businesses, where festive demand is healthy,” said Vinod Nair, Head of Research at Geojit Financial Services.

Nifty PSU Bank, on the other hand, declined 1.09%.

The BSE Midcap climbed 0.90% and the BSE Smallcap ended 1% higher. Investor wealth increased by Rs 2.95 trillion to Rs 318 trillion.

According to experts, the sentiments were also lifted after credit agency Fitch raised India’s medium-term potential GDP growth estimates by 70 basis points from 5.5% to 6.2%.

Foreign portfolio investors continued to be net sellers and offloaded Rs 549.37 crore on Monday while domestic institutional investors purchased Rs 595.70 crore worth of holdings.