Mumbai, June 10 The Bombay Stock Exchange benchmark Sensex on Wednesday surged by nearly 340 points to close at a 10-month high, on aggressive buying by funds on expectations that the government will increase public spending in the budget to boost economic growth.

Sensex gained 339.81 points, or 2.25%, to settle at 15,466.81 points, a level last seen around mid-August 2008.

It touched the day's high at 15,580.81 points.

The National Stock Exchange index (Nifty) soared by 104.30 points, or 2.29%, to 4,655.25, after touching the day's high of 4,688.95.

There are reasons to believe that the recent strong rally might continue. For one, equity analysts are raising earnings forecasts of India Inc on hopes that the government will focus on infrastructure sector and push economic reforms to boost growth.

Finance Minister Pranab Mukherjee is likely to present the Union Budget with focus on 'Aam Admi' while providing special attention to sectors hit hard by global crisis. (ANI)