Indian shares extended early gains to ended higher on Wednesday, boosted by banking stocks after the federal cabinet approved a mechanism to oversee consolidation in public sector banks.

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The benchmark BSE Sensex closed up 0.88 percent at 31,568.01. The broader NSE Nifty ended 0.89 percent higher at 9,852.5. Both the indexes recorded gains for a second straight session.

The Nifty PSU Bank index closed 2.09 percent up.

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