BENGALURU: Indian shares closed at a two-week high on Wednesday, taking heart from the government’s plan to boost spending to pull the economy out of a pandemic-induced slump.

Led by financial and technology stocks, the blue-chip NSE Nifty 50 index closed 1.16% higher at 17,780 and the S&P BSE Sensex advanced 1.18% to 59,558.33.

Both the indexes climbed nearly 1.5% on Tuesday after the federal budget showed the government would increase spending to 39.45 trillion rupees ($527.75 billion) in the coming fiscal year to build public infrastructure and drive economic growth.

After recovering from a recent selloff driven by worries around U.S. interest rates and inflation, the domestic indexes are now just 4% off the record highs they hit in October.

But rising bond yields could affect that positive momentum, Gandhi said.

The benchmark 10-year bond yield spiked to 6.8805% on Wednesday, after surging in the previous session on worries over the budget’s impact on borrowing figures and the fiscal deficit.

The Nifty Bank index and the Nifty PSU Bank index led gains among sub-indexes, rising 2.1% and 3.4%, respectively.