The S&P BSE Sensex posted gains for the second consecutive session on Wednesday, as higher-than-expected rate cut by the Reserve Bank of India (RBI) boosted investor sentiment, apart from support by positive global cues.

The Sensex was up 376 points to close at 26,154 points while the 50-share Nifty rose by 105 points, or 1.35%, to end at 7,948 points.

"The Indian equity market closed with handsome gains on Wednesday extending its winning streak for the second consecutive trading session. RBI's decision of reducing interest rates by 50bps lifted sentiment on the street. Today's rally was led by metals, FMCG, healthcare and IT stocks. Even the interest rate sensitive stocks like realty and auto participated in the upswing," said Amar Ambani, Head of Research, IIFL.

Tata Steel, GAIL, Bharti Airtel, BHEL, Hindalco, HUL, Coal India and Infosys were the top gainers among BSE Sensex stocks. SBI, Axis Bank, Vedanta, TCS, Maruti Suzuki and HDFC were the major losers.

On Tuesday, the RBI surprised the markets by cutting the repo rate by 50bps (basis points) on Tuesday. Markets had expected the central bank to reduce the rate by 25bps.

With the latest cut, the RBI has slashed the repo rate by 125bps to 6.75% so far this year. The central bank, however, kept the cash reserve ratio (CRR) unchanged at 4%.

Among the sectoral indices, metals, realty, and consumer goods were the biggest gainers while bankex remained the sole loser.

"Technically, Nifty managed to close above the previous quarter's low of 7940, which indicates that positive momentum may prolong in the coming days. The main indices managed to keep the momentum going despite FII selling on Tuesday. Investors will now look at the PMI numbers and auto sales figures to get some sense of how the economy is doing. Stocks like HCL Tech could see pressure following a profit warning by the company," Ambani said.

The rally in the global markets also underpinned the positive sentiment in the domestic stock markets.

While the China's Shanghai Composite index ended 0.50% higher at 3,039, the Hong Kong's Hang Seng rose 2.2% to 20,901. Japan's Nikkei was up 2.7% to close at 17,388. Tracking the gains in Asian markets, major European markets opened over 2% higher.

Gold prices were down Rs 175 to Rs 26,400 per 10 grams at the bullion market amid weak trend in overseas markets and reduced demand from jewellers. In the global markets, the yellow metal prices fell following the release of a positive economic data in the US.

However, silver prices rebounded by Rs 50 to Rs 34,750 per kg on the back of a slight improvement in demand from industrial units and coin manufacturers.

The rupee also appreciated sharply against the US dollar taking a cue from rising stock markets; it was up 23 paise at 65.72 against the greenback at close.