The S&P BSE Sensex staged a smart rally, gaining 360 points on Wednesday, tracking a rally in Asian shares on the back of easing concerns over monetary tightening path of the US Federal Reserve.

The Sensex closed at 25,841 points, up 1.41%, while the 50-share Nifty rose 110 points, or 1.43%, to end at 7,842.

The minutes of Fed's October policy meeting showed that the US central bank remains on track to hike interest rate at the December meeting but indicated that it would go slow on further monetary tightening.

"The Federal Open Market Committee (FOMC) members agree that the normalisation of monetary policy will be gradual and that the slow rise of the rate trajectory will also have to be communicated very clearly at the time of the lift-off. In other words: the first rate hike will probably take place in December, but after that the Fed will remain cautious," said Commerzbank Corporates & Markets in a note.

Asian stock rose sharply on indications that the US Fed would tread a cautious path in hiking policy rates after December. While China's Shanghai Composite index ended 1.3% higher, Hong Kong's Hang Seng was up 2%.

The rally was also supported by policy measures announced by the Modi government on Wednesday, which renewed confidence over the government's commitment to reforms among the investors.

The government cleared foreign direct investment (FDI) proposals worth Rs 1,810 crore and authorised the National Highways Authority of India (NHAI) to revive 34 stuck road projects worth at least Rs 35,000 crore.

Besides, the Union Cabinet gave its approval for stake sake in Coal India and initial public offering of Cochin Shipyards. The government also approved a 3% interest subsidy for exports, as they declined for the 11th consecutive month in October.

Railways, logistics and infrastructure stocks went up sharply supported by the announcement of reforms.

"The present administration plans to scale up road capex and has launched a multipronged approach, by creating new programmes, while enhancing funding and organisations tasked with implementing the schemes. There is a $78 billion pipeline of projects coming up for bidding and the prospects are good for road builders and asset owners," Business Standard quoted Bharat Parekh and Aayush Parwal of CLSA, as saying.

The positive mood in the market was also underpinned by hopes of Goods & Services Tax (GST) bill getting passed in the Rajya Sabha's in the winter session of Parliament, which is scheduled to start next week.

On the commodity front, gold prices went up by Rs 155 to Rs 25,780 per 10 gm despite a strengthening dollar. Silver prices also ended Rs 100 higher at Rs 34,200 per kg.