Expectations of rate cut in the Reserve Bank of India (RBI)'s bi-monthly monetary policy outcome due on Thursday, along with some healthy quarterly results, lifted the key equity indices on Wednesday.
Besides, healthy foreign fund inflows also aided the upward movement of market.
Sector-wise, auto, IT and metal stocks led the gains on Sensex, while the consumer durables and utilities declined.
"Domestic market rallied 1 per cent led by broad-based buying across sectors. Nifty breached its narrow trading band of 10,650-10,950 on expectation of a shift in RBI's policy stance and strong FII inflows," said Vinod Nair, Head of Research, Geojit Financial Services.
Additionally, drop in bond yield and marginal strength in rupee added strength to the expectation of lowering of rates, said Nair.
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The BSE Sensex closed 358.42 points or 0.98 per cent higher at 36,975.23, while the Nifty finished the trade 128 points or 1.17 per cent higher at 11,062.45.
Except for Axis Bank and IndusInd Bank, all other Sensex stocks gained.
Bajaj Finance and Tata Steel closed over 4 per cent higher. ONGC, Bajaj Auto and Tata Motors(DVR) gained in the range of 2 to 3 per cent.
--IANS
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