The BSE benchmark Sensex rallied over 358 points on Wednesday while the NSE Nifty recaptured the key 11,000 mark as investors wagered on the RBI changing its policy stance to neutral.
The 30-share Sensex soared 358.42 points, or 0.98 per cent, to close at 36,975.23.
The broader Nifty jumped 128.10 points, or 1.17 per cent, to 11,062.45.
Investor sentiment was bullish ahead of the Reserve Bank of India's policy outcome, scheduled for Thursday, analysts said.
The RBI's Monetary Policy Committee (MPC) began its three-day meet Tuesday to decide on key rates.
According to experts, the MPC is likely to change its policy stance to 'neutral' from the current 'calibrated tightening' on low inflation footprint but would refrain from cutting interest rates due to fiscal challenges and rising crude oil prices.