Tata Steel, up 1.80 per cent, led the gains on the Sensex followed by Bharti Airtel, Larsen and Toubro and Reliance Industries.
At 2.27 p.m. on Wednesday, the Sensex was trading at 41,085.63, higher by 296.25 points and the Nifty was up 92 points at 12,072.30.
The global oil benchmark Brent crude traded below the $55 a barrel-mark as Coronavirus related deaths in China crossed the 400. The virus outbreak has led Chinese oil consumption to fall by 20 per cent.
"Post budget, the market has shifted its focus back to fundamentals and earnings. With strong PMI data, in-line January auto sales numbers, and a decent Q3 (third quarter) FY20 earnings season so far, the sentiments have turned positive," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.
Khemka said that investors now are awaiting the RBI monetary policy which is due on Thursday, and where the central bank is expected to maintain status quo on its rates owing to the rising trajectory of inflation.
The Reserve Bank of India's macroeconomic outlook, presented along with the monetary policy statement, would be keenly watched, he added.
IHS Markit said on Monday said that the Manufacturing PMI index, which rose to 52.7 in December, jumped to 55.3 in January, its highest level in just under eight years.
( With inputs from IANS )