Mumbai, Jan 31 (IANS): Nifty bounced back from a weak start and closed with gains of 204 points at 21,726 levels on Wednesday, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

The broader market outperformed with the Nifty Midcap 100 up 1.6 per cent and the Nifty Smallcap 100 up 2.2 per cent.

All sectors ended in green with buying seen in PSU bank, pharma and realty. Global markets will keenly await the US Fed’s commentary on the rate cut timeline, he said.

On the domestic front, investor’s focus will be on the Interim Budget to be presented on Thursday. While the Interim Budget is a non-event, the general expectations are minimal in terms of major proposals, Khemka said.

Given that India’s economic growth has been strong in the last two years, the government could focus on fiscal consolidation and could set a fiscal deficit target of around 5.2 per cent to 5.4 per cent of the GDP.

"Since it is colliding with the US Fed outcome, we expect the market to see some volatility. However, the overall trend continues to remain positive," Khemka said.

Vaibhav Vidwani, Research Analyst at Bonanza Portfolio, said Nifty Pharma and Nifty PSU Bank were the sectors which outperformed on Wednesday, up by 2.68 per cent and 2.27 per cent, respectively.

The pharma sector was in green due to Sun Pharma's strong results, while PSU banks' expectations of continuing to be profitable in the next quarter fueled optimism for them.

The top gainers on the Nifty were Dr. Reddy's Labs, Eicher Motors, Sun Pharma, Divis Lab and Tata Motors, while the top losers were L&T, Titan, Tata Consumer and BPCL.