At 1:12 pm, the Sensex traded 413.38 points - or 1.12 per cent - higher at 37,371.54, while the Nifty was up 123.90 points - or 1.13 per cent - at 11,049.75.

Top percentage gainers on the 50-scrip index at the time were Tata Steel, UPL, Vedanta, Zee Entertainment, Grasim and Yes Bank, trading between 4.01 per cent and 5.64 per cent higher.

Market breadth was largely positive with 1,125 stocks on the BSE trading higher and 1,074 struggling with losses. On the NSE, 904 stocks advanced while 805 declined.

Reliance Industries, ICICI Bank and HDFC contributed the most to the advances in Sensex.

The gains came a day after reports that the Ministry of Finance is working on a stimulus package for the industry to revive the economy.

News agency IANS quoted official sources as saying that the stimulus package by the government would not only aim to reduce the cost for the industry but would also lay out procedures that would further provide impetus to ease of doing business.

Wholesale inflation eased to 1.08 per cent in July, from 2.02 per cent in the previous month, government data showed on Wednesday. Separate official data earlier showed consumer inflation came in at 3.15 per cent last month, remaining below the Reserve Bank of India's medium-term target for the twelfth month in a row.

Equities in other Asian markets joined a global equities surge on Wednesday, after Washington delayed tariffs on some Chinese imports. Wall Street stocks soared overnight as US President Donald Trump backed off his September 1 deadline for 10 per cent tariffs on the remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods in the hopes of blunting their impact on US holiday sales.

The surge in US stocks lifted MSCI's broadest index of Asia-Pacific shares outside Japan by 0.9 per cent. The Shanghai Composite Index advanced 0.6 per cent while Hong Kong's Hang Seng, which has been hurt by disruptions from large anti-government protests, rose 0.5 per cent. South Korea's KOSPI advanced 0.8 per cent and Japan's Nikkei rose 0.6 per cent.