Benchmark indices snapped two sessions of losing streak today led by a rally in banking, capital goods and pharma stocks. Sensex ended 547.83 points higher at 55,816 and Nifty gained 158 points to 16,641. Market cap of BSE-listed firms rose to Rs 259.71 lakh crore today.

Sun Pharma, SBI, L&T, TCS and Asian Paints were the top Sensex gainers, rising up to 3.39 per cent.

Bharti Airtel, Kotak Bank, NTPC, Bajaj Finserv and Reliance Industries were the only Sensex losers, falling up to 1.32 per cent.

Mid cap and small cap indices rose 209 points and 100 points, respectively.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, "Investors seemed to have priced in a 75 bps rate hike by the US Fed, while recovery in other Asian indices contributed to the overall uptick in markets. However, markets may see bouts of volatility ahead of the monthly F&O expiry tomorrow. Technically, after the correction in the last two sessions, the Nifty took support near 16,450 and reversed the trend. It also formed a promising Bar Reversal bullish candle on daily charts. The texture of the chart indicates continuation of the uptrend wave in the near future. For the trend following traders, 16550 would be the trend decider level, and above the same, the index could hit the level of 16,750-16,800. On the flip side, below 16550, any uptrend would be vulnerable and the index could retest the level of 16,450-16,400."

Banking, capital goods and pharma shares were the top sectoral gainers with their BSE indices rising 447 points, 484 points and 383 points, respectively.

Share Market update: Sensex rises 548 pts, Nifty nears 16,650; SBI, Sun Pharma top gainers

The BSE IT index too rose 373 points to 28,283.

Market breadth was positive with 1,755 stocks ending higher against 1,565 stocks falling on BSE. 145 shares were unchanged.

Vinod Nair, Head of Research at Geojit Financial Services said, "Indian market will react to the global trend in-line with FOMC meeting outcome. We are in a rally during the last one and half months assuming that much is factored in the price. The market has not factored in a recession as valuation continues to trade marginally above the long-term trend. Value buying should be the essence of investment till the risk of a recession subsides."

Foreign institutional investors turned net sellers on Tuesday, offloading shares worth Rs 1,548.29 crore, as per exchange data.

Rupee falls

Meanwhile, the rupee fell 13 paise to close at 79.91 against the US dollar on Wednesday, weighed down by the overall strength in the greenback and expectations of an aggressive rate hike by the US Federal Reserve.

At the interbank foreign exchange market, the local currency opened at 79.83 and ended at 79.91, down 13 paise over its previous close.

Market on Tuesday

On Tuesday, Indian stock market fell for the second straight session led by losses in IT and banking shares amid mixed global cues. Sensex closed 497 points lower at 55,268 and Nifty fell 147 points to 16,483. Mid cap and small cap indices fell 285 points and 321 points, respectively.

Infosys, Axis Bank, HUL, Dr Reddy's, Wipro and Kotak Mahindra Bank were the top Sensex losers, falling up to 3.40 per cent. Bajaj Finserv, Bharti Airtel and Power Grid were the top Sensex gainers, rising up to 5.58 per cent.

Global markets

In Europe, the FTSE 100 in London rose 0.5% to 7,345.81. The DAX in Frankfurt rose 0.3% to 13,136.88 and the CAC 40 in Paris advanced 0.3% to 6,230.48.

The S&P 500 fell 1.2%, the Dow dropped 0.7% and the Nasdaq composite closed 1.9% lower on Tuesday.

In Asia, the Shanghai Composite Index lost less than 0.1% to 3,275.76 while Tokyo's Nikkei 225 advanced 0.2% to 27,715.75. The Hang Seng in Hong Kong sank 1.4% to 20,620.10.