The government will announce the railway budget on 26 February and the national budget on 28 February. Investors will look for the direction of government policy through these two announcements and will keep an eye on annual economic outlook survey on 27 February. Investors are also cautious ahead of future and option expiry on 26 February.

At 9.40am, the 30-share S&P BSE Sensex was up 0.8%, or 233.47 points, at 29,238.13, while the National Stock Exchange’s broader 50-share Nifty was up 0.82%, or 71.35 points, at 8,833.65.

The gainers included Housing Development Finance Corp. Ltd (HDFC) rose 2% to Rs.1,335.60 while Oil and Natural Gas Corp. Ltd (ONGC) rose 1.3% to Rs.319.50 after the company said in a notice to BSE that it will consider a dividend on 20 March.

Among the losers, Hindustan Unilever Ltd fell 0.6% to Rs.908.30 while ITC Ltd fell 0.2% to Rs.395.40.

All the sectoral indices were trading higher. BSE oil and gas index was the top sectoral gainer, up 1.1% followed by BSE realty, metal, power and Bankex which were up 0.9% each. BSE Teck, IT, consumer durables were up 0.7% each. BSE capital goods, healthcare were up 0.6% each. BSE auto was up 0.5%.

Telecom companies were trading higher after the department of telecom said that eight companies pre-qualified for spectrum auction. Bharti Airtel Ltd rose 1.3% to Rs.347.70 while Idea Ltd rose 1.9% to Rs.152.15. Reliance Communications Ltd rose 1% to Rs.69.45.

South Indian Bank Ltd rose 7% to Rs.28.20 after Reserve Bank of India (RBI) has allowed foreign investors to buy further shares in the bank as foreign investment in the bank has gone below the prescribed limit.

ABG Shipyard Ltd rose 8.9% to Rs.220 after the news report said that Adani Group and Mahindra group is in talks with the company to acquire stake in the company. Adani Enterprises Ltd rose 1% to Rs.718.90, Mahindra and Mahindra Ltd (M&M) up 1% to Rs.1,269.90.

Godrej Consumer Products Ltd rose 2.1% to Rs.1,142.50 after the company said in a notice to BSE that it has hiked its stake in hair extension brand Darling South Africa and Mozambique businesses to 90%.

Dewan Housing Finance Corp. Ltd fell 1.1% to Rs.496.40 after the company is raising as much as $130 million through sale of shares to portfolio investors, reports Reuters. The company is offering the shares in the price band of Rs.478 to Rs.488 a share. The stock closed at Rs.502 on Tuesday.

Jubilant Life Sciences Ltd rose 4.6% to Rs.171.75 after the company has received approval from the US health regulator for generic Irbesartan and Cetirizine Hydrochloride tablets used for treatment of hypertension and allergies, respectively.

SpiceJet Ltd rose 4.5% to Rs.25.25 after the company said it has cleared all tax dues and paid salaries. SpiceJet also offered 100,000 seats starting at Rs.1,699 in a new discounted sale for tickets booked by 26 February for travel between 1 March and 20 April.

So far in 2015, the Sensex has gained 6.9%, while foreign institutional investors have bought $3.25 billion from local equity and $5.05 billion from bond markets.

Overnight, US stocks ended higher, after the US Federal Reserve chairperson Janet Yellen suggested the Fed would not rush into raising interest rates, Reuters reported. Dow Jones Industrial Average was up 0.5%, Nasdaq composite up 0.14% and S&P 500 closed up 0.28%.

Asian stocks rose on Wednesday, tracking the cues from Wall Street’s gains. Japan’s Nikkei Stock Average gained 0.14%, Hong Kong’s Hang Seng was up 0.32% and China’s Shanghai Composite advanced 0.1%.