Mumbai, Jan 25 (IANS): Short-covering on the back of futures and options (F&O) expiry, coupled with positive global indices and a marginally strong rupee, cheered the Indian equities markets on Wednesday.

Besides, hopes of incentives in the upcoming Union budget kept investors' sentiments buoyed. 

The key indices provisionally closed the day's trade with substantial gains of around 1.5 per cent each, as healthy buying was witnessed in banking, automobile and consumer durables stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) surged by 126.95 points or 1.50 per cent, to 8,602.75 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,462.83 points, provisionally closed at 27,708.14 points (at 3.30 p.m.) -- up 332.56 points or 1.21 per cent from the previous close at 27,375.58 points.

The Sensex touched a high of 27,736.82 points and a low of 27,439.68 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls -- with 1,507 advances and 1,240 declines.

On Tuesday, the NSE Nifty rose by 84.30 points or 1.00 per cent, to close at 8,475.80 points, while the BSE Sensex was up 258.24 points or 0.95 per cent.