The Sensex and Nifty extended gains for the second day amid Asian markets recovering from two-month lows. While the Sensex was trading 144 points higher at 34,446, the Nifty rose 52 points to 10,598 level. Midcaps and small cap indices led the recovery rising 100 points and 125 points, respectively.
Among BSE sectoral indices, IT stocks led the gains with BSE IT index rising 206 points to 12,296 level.
Banking stocks which fell during the last few sessions also saw gains with the bankex rising 160 points to 28,891 level.
Infosys (1.83%), Dr Reddy's (1.57%) and TCS (1.51%) were the top Sensex gainers.
IndusInd Bank was the top stock on BSE in terms of volume with turnover value rising to Rs 7.16 crore.
Market breadth was positive with 1,250 stocks rising compared with 583 falling on the BSE. 66 stocks were unchanged.
Punjab National Bank which fell 22 percent during the last two sessions was down 2.61% to 125 level on BSE. State-owned Punjab National Bank on Wednesday said it has detected a $1.77 billion (about Rs 11,400 crore) scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders. PNB suspended 10 officers and referred the matter to CBI for investigation.
On Thursday, BSE Sensex closed higher by 141.52 points, or 0.41%, to 34,297.47, while the Nifty 50 rose 44.60 points, or 0.42%, to end at 10,545.50.
However, BSE midcap and smallcap fell 0.46% and 1.27%, respectively. Punjab National Bank shares declined for a second consecutive session after it unearthed fraudulent transactions of around $1.77 billion. PNB shares closed nearly 12% lower.
US debt yields stood near multi-year highs. Two-year note yields hit a 9 1/2-year high as bond prices fell on Federal Reserve officials' signalling that recent volatility in US stocks would not stop them raising interest rates in March.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, though many Asian markets will be closed on Friday for the Lunar New year.
Japan's Nikkei rose 1.76 percent or 376 points to 21,840 level.
Oil prices maintained this week's gains, with U.S crude futures trading at $61.49 per barrel, up 3.9 percent so far this week.