The S&P BSE Sensex and NSE Nifty 50 indexes extended gains in last hour of trade defying a weak trend in global markets. The strength in the markets comes a day after Finance Minister Nirmala Sitharaman said the government will soon hold discussions with representatives of foreign portfolio investors, amid continuing overseas fund outflow from the markets following its decision to impose a surcharge on certain classes of such investors. The Sensex rose as much as 520 points and the broader Nifty index moved above the important psychological level of 11,000.

Economic Affairs Secretary Atanu Chakraborty said he would hold discussions with representatives of foreign portfolio investors (FPIs) soon.

Global stocks extended already substantial losses on Tuesday, after Washington tagged China as a currency manipulator, shaking fragile investor sentiment in a rapid escalation of the US-China trade war.

US Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing.

Back home, gains in today's session were led by buying interest in HDFC, Larsen & Toubro, ICICI Bank, Kotak Mahindra Bank, HDFC Bank and Bharti Airtel.

At 2:26 pm, the Sensex traded 503 points or 1.37 per cent higher at 37,203 and the Nifty 50 was up 141 points or 1.3 per cent at 11,004.

All the 19 sector gauges compiled by the BSE traded higher led by the S&P BSE Capital Goods index, which was up 2.2 per cent.

The realty, metal, banking, telecom, industrials, finance and basic materials sector gauges also climbed between 1 and 1.9 per cent each.

Mid- and small-cap shares outperformed their larger peers, with the S&P BSE MidCap and SmallCap indexes rose over 1 per cent each.

Indiabulls Housing Finance was top gainer in the Nifty 50 basket of shares. The stock rose as much as 7.85 per cent to hit an intraday high of Rs 514 on the BSE. Tech Mahindra, Yes Bank, Bharti Airtel, Larsen & Toubro and Coal India were among prominent gainers.

On the other hand, Zee Entertainment, Cipla, Power Grid, Wipro, Tata Motors and Bajaj Auto were among the losers.

Overall market breadth favoured buyers as 1,493 shares were advancing while 739 were trading higher on the BSE.

(With inputs from Reuters)