The markets closed higher for the second consecutive day with the Sensex continuing its northward journey and closing the day up 105 points at 18,605 while the Nifty gained 31 points to end at 5,592.
However the broader markets surged ahead where both the smallcap and the midcap indices gained 0.8% each as compared to the Sensex which added 0.5 per cent.
Earlier in the day, the key benchmark indices, Sensex and the Nifty hit 2-1/2-week highs in early trade touching a high of 18,636 helped mostly by the higher Asian stocks.
However a bout of volatility was witnessed in mid-morning trade where the Sensex slumped to touch an intra-day low of 18,514, down 122 points from the high.
Meanwhile, the increasing strength in index heavyweight, Reliance Industries and resilient Asian stocks and gains in US index futures helped the Indian stocks to retrace and scale higher through the day.
A K Prabhakar, senior vice president Equity Research, Anand Rathi says, "The bounce witnessed in the last four five days can be considered as 'technical bounce' till 5750. The 200DMA of Nifty is 5750 which is important for any fresh rally."
Aviation stocks were in the spotlight on Wednesday as all the aviation scrips reacted on reports that state-run oil marketing companies have cut jet fuel prices by about 4%,