A morning walk down Dalal Street | Positive momentum possible only if Nifty holds 10,850

Both indices managed to reclaim crucial resistance levels towards the close of the trade. For Sensex, it was 36000 while for Nifty, it was 10900. Most experts are of the view that as long as Nifty holds above 10800, bulls should remain in charge of D-Street.

On the macro front, govt will unveil manufacturing PMI data for the month of December. The activity improved in November and touched an 11-month high. The Nikkei India Manufacturing Purchasing Managers' Index strengthened to 54.0 in November from 53.1 in October. 

The Indian rupee strengthened against the US dollar, tracking gains in some Asian currencies. The rupee settled at 69.43, up 34 paise from its previous close of 69.77 on Tuesday. This was the highest close of the rupee since early August, said a report.

On the institutional side, FPI were net sellers in Indian markets for about Rs 48 crore while DIIs were net buyers to the tune of Rs 142 crore, according to provisional data.