The Bank Nifty index hit life-time high earlier and sharp gains were also seen in auto and financial service stocks.
Shrikant Chouhan of Kotak Securities said that the Nifty PSU banks space, mainly the SBI, gained momentum in the last hour of trade, after SBI Cards filed its IPO papers with the Sebi.
The gains came despite a surprising turn of political events in Maharashtra and concerns about India's economic growth, said Deepak Jasani of HDFC Securities.
Yes Bank rose 8 per cent on reports that the board of directors of Yes Bank will
meet on Friday to consider fund raising through issue of fresh equity.
Shares of RBL Bank hit a two-month high of Rs 371, up 6.7 per cent in intra-day trade, on report that the bank is looking to raise up to Rs 2,000 crore through a qualified institutional placement (QIP) offering.
World shares made another push for an elusive record high on Wednesday after US President Donald Trump said Washington and Beijing were in the final throes of inking an an initial trade deal. European shares hit a 4 year high.
Emerging market stocks nudged higher on Wednesday after comments from Trump spurred hopes of a resolution to the trade dispute between the United States and China.
( With inputs from IANS )