Indian shares rose more than 1 per cent on Wednesday, with banking and automobile stocks leading the rebound in broad-based buying, as investors awaited the US Federal Reserve's policy decision.

The blue-chip NSE Nifty 50 index rose 1.39 per cent to 16,894.25 and the benchmark S&P BSE Sensex gained 1.48 per cent to 56,601.68.

The Fed's two-day meeting will end later in the day, where the central bank is widely expected to raise its benchmark overnight interest rate by a quarter of a percentage point.

Domestic investors will be keeping a close eye on the Fed's tone and commentary and what it would mean for emerging economies.

So far this year, a combination of overvaluation fears, consistent selling by foreign investors, a miss on economic growth estimates and the Russia-Ukraine conflict pushed both the Nifty and Sensex down 2.8 per cent each.

In Mumbai trading on Wednesday, all major sub-indexes were up, with the Nifty Bank Index and the Nifty Auto Index adding 1.93 per cent and 1.71 per cent, respectively.

Food delivery firm Zomato gained as much as 4.5 per cent a day after a report said it had reached a merger agreement with instant-delivery startup Blinkit.

Broader Asian markets were higher, helped by a rebound in battered Chinese stocks.

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