Indian shares jumped more than 1 percent on Wednesday, with nearly all sectors gaining after the rupee strengthened, and non-banking financial companies (NBFCs) saw some boost with the top lender raising target for its buying loan portfolio.
All eyes are now on the earnings season with information technology major Tata Consultancy Services Ltd set to report September-quarter earnings on Thursday.
The local currency strengthened, recovering from a record closing low on Tuesday, as gains in other Asian peers and stronger domestic equities helped the trading sentiment, while the announcement of the first open market bond purchase for October aided bonds.
"There has been a considerable meltdown in the past 10-15 days and it's natural to see some bounce after that... There are rumours about NBFC space being addressed. The news about SBI buying assets may have helped," said Dhananjay Sinha, head-institutional research, Emkay Global Financial Services.
Pressure on market in general is expected to continue, he added.
The broader NSE Nifty was up 1.33 percent at 10,437.80 as of 0540 GMT, while the benchmark BSE Sensex was 1.19 percent higher at 34,708.33.
The State Bank of India said on Tuesday it is stepping up its target to buy "good quality" asset portfolios from NBFCs, bringing cheer to the sector which has been beaten after defaults by Infrastructure Leasing & Financial Services.
Bajaj Finance Ltd's stock was the top percentage gainer on the NSE index, up as much as 9.1 percent. Shares of Dewan Housing Finance Corp, Edelweiss Financial Services Ltd and Shriram Transport Finance were among other gainers from the sector.
Shares of automakers jumped, with the Nifty Auto index up 2.2 percent, driven by TVS Motor.
Aviation companies' stocks rose after a media report said that the finance ministry is expected to submit a proposal to the Election Commission to cut excise duty on aviation turbine fuel.
Mid-cap stocks, too, witnessed improvement, with the Nifty Midcap 100 index — down 24 percent this year so far — rising as much as 3.1 percent. It posted it biggest daily percentage gain since Feb. 15, 2016.