Indian shares rose on Wednesday after four consecutive sessions of falls as investors saw recent losses as overdone, even though sentiment was broadly cautious ahead of the U.S. Federal Reserve's policy decision and the Brexit referendum.
The Fed is expected to keep interest rates unchanged, and investors await Chair Janet Yellen's news conference later in the day. The central bank will also issue its updated economic projections.
Meanwhile, Britain is due to hold a referendum next week on whether to exit the European Union.
Still, analysts said shares had now found some support after the Nifty fell 2 percent in the previous four sessions.
Investors are also hopeful parliament will approve a revamped goods and services tax that would supplant multiple federal and state levies. While support has increased among states, it is yet to achieve a breakthrough.
"At the end of four-five days, most of this weak news may have been priced in and the value-buying may have added strength to the recovery," said Anand James, chief market analyst, Geojit BNP Paribas Financial Services.
The Nifty was up 0.47 percent at 8,147.20 as of 0820 GMT, while the Sensex was 0.55 percent higher at 26,540.26.
Some of the blue chips that were recently hit recovered on Wednesday. Larsen & Toubro gained 2.26 percent after declining 3.35 percent over the previous four sessions.
Among other gainers, State Bank of India and some of its associate banks rose after CNBC-TV18, citing government sources, reported that the cabinet might approve the merger of five associate banks with the country's biggest lender.
SBI shares rose 1.56 percent, while those of State Bank of Travancore and State Bank of Bikaner and Jaipur gained 10.51 percent and 8.68 percent, respectively.
Jet Airways, InterGlobe Aviation and SpiceJet rose after TV channels quoted sources as saying that the cabinet had cleared the national civil aviation policy.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu)
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