Update: 3.30 p.m. IST â€” The Sensex ended at 26,726, up 331 points, or 1.25 percent. Top Sensex gainer was NTPC (up 4.22 percent) at Rs. 154.45, followed by SBI (up 3.66 percent) at Rs. 215.15. Other Sensex gainers included Larsen & Toubro, Maruti Suzuki and Bharti Airtel.
Among the BSE500 companies, SBT was the top gainer (up 19.99 percent) at Rs. 478.90.
Update: 3.05 p.m. IST â€” The Sensex spurted over 340 points, or 1.29 percent and was trading at 26,737.40. SBI shares were the biggest Sensex gainer, up 4.36 percent at Rs. 216.60, followed by Larsen & Toubro, NTPC and Bharti Airtel.
Aviation stock also rose after the government cleared the new civil aviation policy. SpiceJet was up 3.51 percent at Rs. 66.40, Jet Airways at Rs. 563 (up almost 1 percent) and Indigo-owner Interglobe Aviation at Rs. 1,013 (up 2.40 percent).
The government has done away with the 5-year condition in the 5/20 rule in the new civil aviation policy, paving the way for Go Air to fly overseas.
Update: 12.20 p.m. IST â€” Shares of SBI associate banks such as State Bank of Mysore (SBM), State Bank of Bikaner & Jaipur (SBBJ) and State Bank of Travancore (SBT) flared up on the BSE, with SBM and SBT hitting 52-week high.
The surge was attributed to the Central government taking a decision on their merger with parent State Bank of India on Wednesday.
SBT shares were trading at Rs. 441 apiece at around 12.15 p.m., up 10.50 percent after hitting a 52-week high of Rs. 458, while SBM shares had gained 11.48 percent at Rs. 509 apiece, receding from the 52-week high of Rs. 527.50. The SBBJ stock was trading at Rs. 544, up 8.87 percent.
The SBI stock was up 1.16 percent at Rs. 209.95.
The Sensex was up 124 points at 26,519.
The Sensex was trading with a gain of about 100 points around 10.40 a.m. on Wednesday, led by Bharti Airtel, State Bank of India, Hero Motocorp and Larsen & Toubro (L&T).
The 30-scrip benchmark index was at 26,495, while the broader 50-scrip NSE Nifty was trading above the 8,100-mark at 8,132.
Both the indices had closed flat on Tuesday.
Shares of Maruti Suzuki and Mahindra & Mahindra (M&M) were up marginally on news that the implementation of the Goods and Services Tax (GST) Bill will benefit these companies.
"Overall tax rates on small cars (vehicles less than 4 metre in length and engine size less than 1,200 cc/1,500 cc for petrol/diesel variants), two-wheelers and commercial vehicles will come down to 18 per cent of ex-showroom prices from around 24 per cent currently, leading to 7 per cent reduction in vehicle prices," NDTVProfit quoted from an analysis by Kotak Institutional Equities.
Meanwhile, India Inc. is hopeful of a consensus over the GST Bill, whose draft was released by the Central government on Tuesday.
"We look forward to the positive movement and with these initiatives, it is expected that implementation of GST with effect from April 1, 2017 will become a reality," Chandrajit Banerjee, director-general of industry body Confederation of Indian Industry (CII) told PTI.
The GST BIll, which has already been passed by the Lok Sabha, is expected to be introduced in the Rajya Sabha during the monsoon session that commences in July.
The model GST Bill has 162 clauses and 4 schedules and was released by the government after a meeting of Empowered Committee of state finance ministers was held in New Delhi on Tuesday.
Except for the Jayalalithaa-led AIADMK and the Congress, almost all parties have expressed their support to the Bill, described by Finance Minister Arun Jaitley as a legislation that aims at "economic integration" of India.
Virtually all states have supported the idea of GST except Tamil Nadu, which has "some reservations", said Finance Minister Arun Jaitley, who chaired the meeting.
Asian stock markets were trading with gains at around 9.25 a.m. (IST) on Wednesday even as investors were waiting for the outcome of the U.S. Federal Reserve and Bank of Japan's meetings.
The U.S. Federal Reserve's two-day meeting ends on Wednesday, coinciding with the Bank of Japan's monetary policy meeting that begins on the same day.
Brexit fears and other global concerns hit European markets on Tuesday. "The European market ended Tuesday further lower and ended at their lowest level in over three months. Potential Brexit and weakness in the Asian markets continued to dampen the sentiment in the overall European markets," brokerage firm Angel Broking said in a note on Wednesday.