Consequently, the key indices closed flat with a positive bias, as healthy buying was witnessed in healthcare, oil and gas and information technology (IT) stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up 17.70 points, or 0.21 per cent to 8,650.30 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,065.25 points, closed at 28,059.94 points -- up 69.73 points, or 0.25 per cent from the previous close at 27,990.21 points.
The Sensex touched a high of 28,108.39 points and a low of 27,959.87 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bulls -- with 1,524 advances and 1,189 declines.
On Monday, both the key Indian indices had closed flat -- marginally in the green, prompted by mixed global cues and lower crude oil prices.
The barometer index had risen by 4.67 points, or 0.02 per cent, while the NSE Nifty inched up 3.45 points, or 0.04 per cent.
Initially on Wednesday, the benchmark indices opened on a flat note on the back of negative Asian and European markets, and slightly positive US markets.
Investors were also watchful of the negotiations for amendments in the Double Taxation Avoidance Agreement (DTAA) between India and Singapore.
In addition, caution prevailed in the markets ahead of futures and options (F&O) expiry on Thursday and hampered the upward trajectory.
Moreover, the markets traded with apprehension as caution prevailed ahead of a speech by Federal Reserve Chair Janet Yellen later in the week.
Investors are vigilant of a possible interest rate hike in the US as this can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Besides, lower crude oil prices and a marginally weak rupee led the key indices to cap gains.
The rupee depreciated by five paise to 67.11 against a US dollar from its previous close of 67.06 on Tuesday.
"Largely the markets are flat ahead of the F&O expiry tomorrow (Thursday). The investors are also keeping an eye out on the amendments in the India-Singapore tax agreement," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"Oil prices are steeply down, one of the main reasons being caution ahead of US crude oil inventory data due tomorrow. The foreign institutional investors (FII) continued to be net sellers during the week."
According to James, a sharp recovery in European markets from the day's lows also prompted a surge in Indian equities towards the end of day's trade.
In terms of investments, provisional data with exchanges showed the FIIs sold stocks worth Rs 39.28 crore, while the domestic institutional investors (DIIs) purchased scrips worth Rs 129.18 crore.
Sector-wise, the S&P BSE healthcare index surged by 208.76 points, followed by the oil and gas index, which was up 158.17 points, and the IT index rose by 45.27 points.
On the other hand, the S&P BSE metal index slipped by 22.10 points, the telecom index fell by 4.31 points, and the capital goods index inched down 1.51 points.
Major Sensex gainers during Wednesday's trade were: Maruti Suzuki, up 2.40 per cent at Rs 4,949.10; Cipla, up 1.97 per cent at Rs 565.90; Infosys, up 1.76 per cent at Rs 1,057.55; NTPC, up 1.54 per cent at Rs 161.25; and ONGC, up 1.07 per cent at Rs 240.85.
Major Sensex losers were: Lupin, down 2.16 per cent at Rs 1,521.10; Tata Steel, down 1.38 per cent at Rs 380.15; Tata Consultancy Services (TCS), down 1.20 per cent at Rs 2,571.90; Tata Motors, down 1.10 per cent at Rs 498; and Adani Ports, down 0.81 per cent at Rs 270.30.
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