New Delhi, Mar 10 (IANS): India's key equity indices extended their rally from the previous session and traded sharply higher during the early session on Thursday.

A substantial fall in global crude oil prices seems to have fueled fresh optimism amongst investors.

Global crude is currently trading at $113 per barrel against over $130 recorded earlier this week which was more than a decade high.

"The extreme volatility in markets is reflected by the $30 drop in crude and 3 per cent spike in Nasdaq. Such massive ups and downs are the consequences of high levels of uncertainty and sharply fluctuating market expectations," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"High quality financials present good buying opportunities now. The downside risk is limited."

At 10.04 a.m., Sensex traded 2.3 per cent or 1,251 points up at 55,898 points, whereas Nifty 2.2 per cent or 361 points up at 16,706 points.

Notably, all Nifty sectoral indices traded sharply higher in the opening session with Nifty bank leading the most.