The Sensex which touched an intra-day high of 16,962 finally ended up 37 points at 16,897 while the Nifty which touched an intra-day high of 5,142 closed higher by 17 points at 5,121.
Meanwhile, rupee was trading at 55.99/00 versus its 55.95/96 close on Tuesday, trading largely in range with thin volumes.
Most dealers awaiting outcome of crucial Federal Reserve meeting later in day, with focus on whether central bank will announce more bond purchases.
On the global front, Asian markets rose on Wednesday as investors bet on a new round of stimulus from the U.S. Federal Reserve to pep up a flagging US recovery and offset the impact of a deepening euro zone debt crisis.
The Nikkei climbed 1.1% to 8,752.31, its highest closing level since May 17, as risk sentiment picked up and spurred gains for insurance and real estate companies.
European shares and the euro steadied on Wednesday, pausing after strong gains, as investors waited to see if the US.
Federal Reserve will adopt further monetary stimulus to help counter faltering economic growth. FTSE and CAC are trading slightly higher whereas DAX marginally down.
Back home, BSE Metal, Capital Goods, Healthcare, Power, Auto, Consumer Durable, Oil & gas and PSU indices surged between 0.6-1.3%. However, BSE Technology, FMCG and Realty indices ended marginally negative.
From the Metal space, Sterlite Inds was the top Sensex gainer, up over 3%. JSPL and Tata Steel gained between 2-3%.
Capital Goods majors like L&T and BHEL spurted between 1-2% on after the Prime Minister's Office (PMO) called for a meeting today Wednesday to revive the contentious issue of imposing duty on foreign power equipment in the country.
Tata Power gained 2% on hopes that correction in global coal prices could boost profitability of power producers.
ONGC gained by nearly 2% on reports that its overseas arm, ONGC Videsh, is planning to sell 50% stake in its Cuban offshore blocks.
Hindustan Unilever ended 2% higher and joined the elite club of Indian companies with market capitalisation of over Rs 1-lakh
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