The key benchmark indices extended gains in the afternoon deals, hitting new year highs. Asian stock markets rose on Wednesday as China's economy showed more signs of recovery.

The Sensex and Nifty had soared to new 52-week highs when it touched 17,258 and 5,124 respectively at their day's highest levels.

The Sensex was recently up 216 points to 17,242 levels and the Nifty rose 69 points to 5,124.

Ace stock market investor, Rakesh Jhunjhunwala told NDTV that the stock market recovery has taken him by surprise. There is a lot of optimism in the markets this Diwali and Indian markets are in a long term bull phase given the turnaround in industrial growth, he said.

The billionaire investor is bullish on retail, banking, and infra stocks. He expects markets to go in the short and long term but sees a correction happening in the medium term.

PN Vijay, MD of PN Vijay Financial Services, said, The second quarter results are very important for the markets. Though the overall fundamentals are improving, valuations are a bit on the higher side.

Metal soared as slumping dollar sent commodities which are largely priced in dollars and therefore tend to rise when the US currency falls surging once again. The BSE metal index jumped over 4 per cent. Power, capital goods realty and auto indices also logged over 2 epr cent gains.

Among the Sensex stocks, M&M and Sterlite were up over 5 per cent. Hindalco, Tata Motors and Tata Steel were had advanced over 3 per cent. Telecom Stocks Bharti and RCom were down over 3 per cent.

Helping lead the Asian stock markets advance were shares in major technology companies after US chipmaker Intel Corp. issued a surprisingly cheery profit forecast for the rest of the year.

Investors were heartened by news the slump in China's exports eased in September, a sign global trade was improving and aiding the government's efforts to engineer a stronger turnaround in the world's third-largest economy.

Combined with huge amounts of easy money freed up by governments to rebuild their economies and companies, growth in China has helped drive Asia's markets in the last six months.

In mainland China, Shanghai's index jumped 2.1 per cent. Hong Kong's Hang Seng rose 292.93 points, or 1.4 per cent, to 21,760.29.