Sensex, Nifty on track to snap two days of falls on global rally

REUTERS - Indian stock markets rose more than 1 percent on Wednesday, heading for their first gain in three sessions, as global markets gained after U.S. Federal Reserve Chair Janet Yellen called for caution when raising interest rates.

In a speech on Tuesday, Yellen also said inflation has not yet proven durable against the backdrop of looming global risks to the U.S. economy, in her first comments since the Fed held rates steady two weeks ago.

Asian stocks rose as a result, with investors also encouraged by a rally in crude oil prices and expectations that the European Central Bank will ease policy later in the day.

Foreign investors have bought a net $3.08 billion in Indian shares so far this month, taking the year's inflows to $208.58 million.

"It's broadly a liquidity-driven push, which has come from the global market. Earlier there were apprehensions that there will be tightening of liquidity, but Fed comments show it's not in hurry to do so," said Deven Choksey, managing director at KR Choksey Securities.

The broader Nifty was up 1.4 percent at 7,701 as of 0740 GMT, while the benchmark BSE Sensex was 1.3 percent higher at 25,232.63.

Sun Pharmaceuticals rose 2 percent after the drugmaker said it acquired 14 prescription brands in Japan from Novartis AG for $293 million.

Tata Steel was up 2.5 percent after Britain's largest steelmaker said it is considering the sale of its entire UK business to stem heavy losses.

Drugmaker Lupin gained 4.7 percent, recovering from Tuesday's losses when it said the U.S. Food and Drug Administration had issued observations for a facility in central India.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Subhranshu Sahu)