Indian shares edged higher on Wednesday, taking cues from other Asian stocks that rallied to 4-1/2-month highs, as investors bet the latest round of talks between the United States and China would yield a trade deal, putting an end to a protracted tariff war.
U.S. President Donald Trump said on Tuesday that trade talks with China were going well and suggested he was open to pushing off the deadline to complete negotiations, saying March 1 was not a "magical" date.
Tariffs on $200 billion worth of Chinese imports are scheduled to rise to 25 percent from 10 percent from March 1 if the world's two largest economies do not settle their trade dispute.
The broader Nifty rose 0.69 percent to 10,677.40 as of 0602 GMT, while the benchmark Sensex gained 0.66 percent to 35,585.29.
"For Nifty, 10,600 is an important support region. In the absence of any key price triggers, that has acted as temporary bounce point," said Anand James, chief market strategist at Geojit Financial Services, adding that the market is also tracking progress in the China-U.S. talks.
The U.S. Federal Reserve will release the minutes from its January meeting later in the day, while the RBI is scheduled to release the minutes of its February meeting on Thursday.
"There is some bargain-hunting happening. Apart from infrastructure stocks, ancillary sectors such as materials, cement, metals have also found some buying in anticipation of the GST meeting," James said.
IT stocks bounced back after two days of losses. Shares of Infosys Ltd, the top gainer on the NSE index, rose as much as 1.6 percent.
Financial stocks such as ICICI Bank Ltd and energy stocks such as Reliance Industries Ltd were also among the biggest gainers. ICICI Bank advanced as much as 1.3 percent, while Reliance Industries added 1.4 percent.
Meanwhile, shares of Anil Ambani's Reliance group companies fell after India's Supreme Court found Ambani guilty on contempt in Ericsson case.
Reliance Communications Ltd shares dropped as much as 9.2 percent, while those of Reliance Infrastructure Ltd fell as much as 8.8 percent.