A decline in crude oil rates from their 31-month peaks, positive signs prior to the earnings season commencing on Friday in addition to short-covering by investors witnessed Indian bourses grew by more than 2% on Wednesday.

The 30-share index BSE Sensex surged 434 points to mark its closure at 19,696.

In contrast, the broad-based Nifty ended 2.17% up at 5,911.50.

Broader markets also ended the day on a positive note, with the BSE midcap index surging 1.4% and the BSE small cap index remained up by 1.3%.

Market analysts stated that it was unlikely that the rally would be sustained as long as oil and commodity prices remain high. While Brent crude oil prices have corrected by $5 (Rs. 222.50) per barrel since Monday, they are still trading at $121.

The fall in oil rates, however, encouraged investor reaction across Asia, with the majority of markets making headway. Analysts had previously showed worries that high prices could result in demand annihilation and damage growth.

Oil fell over $3 on Tuesday as Goldman Sachs Group Inc. admonished yet again of a price turnaround and key predictors stated that costly crude could hit demand.

The IEA, an energy policy consultant to Western consuming nations, said that lofty rates are starting to hit oil demand growth, said the International Energy Agency (IEA), an energy policy adviser to Western consuming nations.

OPEC maintained the 2011 oil demand estimate steady in its monthly account, but stated that the group witnessed a risk that higher rates could decrease that for transport fuel.

Gaurang Shah, head of wealth management at Geojit BNP Paribas Financial Services Ltd stated that the slump in oil rates encouraged reaction and result in some short-covering by investors.

"With FII (foreign institutional investment) flows slowing down and concerns over high inflation and commodity prices still remaining high, we do not expect the markets to move up significantly," M. Gaurang stated.

Stock markets were also encouraged by optimistic earnings anticipations from IT companies as well as banking institutions.

Indian stock markets remained closed today (April14) because of constitution maker Babasaheb Ambedkar's birthday.