Improvements in the labour market has triggered this sentiment.
The apex bank's observation on Tuesday comes at a time when global markets remain uncertain about the overall impact of the tsunami and the subsequently unravelling nuclear crisis in Japan.
Crucially, the US central bank softened the blow by making its forward guidance even more dovish.
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On speculative front as well, non-commercials have decreased bullish bets on COMEX silver futures and options to a three-month low.
Brazil and other developing nations are growing anxious about the expected withdrawal of stimulus in the United States
Barack Obama is likely to pick a candidate to succeed Ben Bernanke sometime during the summer.
The Indian financial system is driven more by the domestic factors and "Fed rate cut is one of the triggers to review rates ", said Union Bank Bank of India chairman M V Nair.
Moody's has a 'Baa3' rating for India, with a positive outlook.
Infosys was the top gainer in the Sensex pack, rising over 2 per cent, followed by Bajaj Finance, HCL Tech, Tata Steel, Tech Mahindra and NTPC. On the other hand, Maruti, Sun Pharma, HUL and ITC were among the laggards. Nifty rose 122.15 points to 17,343.55.
Investors have scaled back their allocation to equities as pessimism has reached "dire" levels due to cloudy economic outlook, according to the latest Bank of America (BofA) monthly global fund manager survey that covered nearly 300 money managers with combined assets of $800 billion. The survey showed that the expectations for global growth and profits are at all-time lows and cash levels are at highest since the 9/11 attacks. Interest rate hikes by central banks, the unwinding of an easy monetary regime, disruptions in global supply chains, and fears of recession have heightened market volatility since the beginning of the year.
Many banks' profits will take a hit and a few of them could even end up being in the red because of treasury losses, triggered by a sudden spike in government bond yields in the rising interest rate cycle, notes Tamal Bandyopadhyay.
Buffett said the economy is benefiting from improvement in areas that had not previously performed well, particularly homebuilding.
Second quarter earnings of companies, starting with the Infosys results, export-import numbers and industrial production data, could keep markets volatile in the week ahead.
The 30-share BSE Sensex shed 0.9% or 186 points at 20,536 while the 50-unit NSE Nifty was off 1% or 61 points at 6,091.
Macro-economic data from China and minutes of the US Federal Reserve's last meeting caused the turmoil as stocks tumbled around the globe.
