The Sensex and Nifty vaulted to fresh lifetime peaks on Wednesday, boosted by telecom and auto stocks which saw brisk buying after the government announced packages for the sectors.

A rebounding rupee and persistent foreign capital inflows added to the momentum, traders said.

Rising for the second day, the 30-share BSE Sensex surged 476.11 points or 0.82 per cent to close at its new all-time high of 58,723.20. It touched an intra-day record of 58,777.06.

Similarly, the broader NSE Nifty climbed 139.45 points or 0.80 per cent to its fresh closing record of 17,519.45. During the session, it touched an all-time peak of 17,532.70.

NTPC was the top gainer in the Sensex pack, rallying 7.16 per cent, followed by Bharti Airtel at 4.53 per cent.

HCL Tech, Titan, SBI, PowerGrid, TCS, and IndusInd Bank also notched up gains.

On the other hand, Axis Bank, Asian Paints, UltraTech Cement, Nestle India, Sun Pharma, and HDFC Bank were among the laggards, shedding up to 0.38 per cent.

In big bang reforms, the Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100 per cent foreign investment through the automatic route.

The Cabinet also approved a Rs 26,058 crore production linked incentive (PLI) scheme for the auto, auto-components, and drone industry to enhance India's manufacturing capabilities.

"The measures announced for the telecom and auto industry are sweeping with potential for far-reaching beneficial impact. A four-year moratorium on dues of the telecom sector which covers AGR, spectrum dues, and interest payment will bring big relief to the cash-strapped sector. This is positive for banks, too, since banks' exposure too will decline significantly," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Rs 26,058 crore PLI scheme for automobiles, auto components, and drones is a major initiative to attract advanced auto technology and supply chains into India, he noted.

"This is a timely policy when global supply chains are looking for markets outside China for shifting supply chains. The PLI scheme's goal of investment of Rs 42,500 crore in 5 years is ambitious but achievable. In brief, bold reforms," he added.

All BSE sectoral indices closed in the green, led by telecom (3.45 per cent), utilities (2.29 per cent), power (2.01 per cent), teck (1.81 per cent), and consumer durables (1.62 per cent).

In the broader markets, the BSE midcap and smallcap gauges advanced up to 0.86 per cent.

On the global front, markets were weighed by weak China retail sales data amid a resurgence of Delta variant cases in the country.

However, US inflation data showed a slower-than-expected rise in prices, giving room to the Fed to continue with its accommodative stance.

Elsewhere in Asia, bourses in Shanghai, Tokyo and Hong Kong ended with losses, while Seoul closed higher.

Equities in Europe were trading on a mixed note in mid-session deals.

Meanwhile, international oil benchmark Brent crude spurted 1.05 per cent to USD 74.37 per barrel.

The rupee closed 18 paise higher at 73.50 against the US dollar on Wednesday, tracking sustained foreign fund inflows.

Foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 1,649.60 crore on Tuesday, as per provisional exchange data.