BSE Sensex climbs 156 points on positive budget outlook

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The market breadth at BSE was positive as 1,654 shares advanced and 1,072 declined on volume of 251.4 million shares.

The broader 50-share S&P CNX Nifty of the National Stock Exchange (NSE) added 1.33 percent to close at 5,270.05. It touched the day's high of 5,281.20 and a low of 5200.80 points.

According to trade analysts, investors' confidence was buoyed by the annual rail budget, unveiled Tuesday, which cut passenger fares and freight rates and stressed on plans to modernize the rail network.

Investors are also looking forward to the main budget for the fiscal year beginning in April, which is expected to give tax breaks to individuals and companies and step up spending to woo voters ahead of national elections that will be due by early 2009.

The main budget will be announced on Friday.

"There has been certainly some improvement in the sentiment as global markets are doing well," said Amitabh Chakraborty, president of equities at Religare Securities.

"People expect at least there will be no negative surprise in the budget, it being the last budget before elections," he added.

Elsewhere in the region, Karachi's 100-share index gained 0.73 percent to 15,056.27, and Colombo's All-share index inched up 0.26 percent to 2,527.62.

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