The BSE Sensex ended (provisional) at 17,528, up 66 points and the Nifty at 5,327, up 25 points.
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(Updated at 1442 hours)
Markets gained strength in the afternoon trades on the back of strength in European markets which opened higher on the back of rate cut expectations. Following this the Sensex touched a high of 17,562. At 2:40 pm, the Nifty gained 21 points at 5323 and the Sensex added 72 points at 17534.
The broader markets continue to outperform with the midcap and the smallcap indices up 1% each as compared to the Sensex which added 0.5%.
The Asian markets closed mixed. Japan's Nikkei share edged lower on Thursday, with traders saying they believed a one-month rally that had taken the benchmark to a 2-month high and close to resistance at its 75-day moving average was running out of steam. Shanghai Composite lost 1% and Hang Seng gained 0.5%.
European markets opened higher as the European Central Bank is widely expected to cut borrowing costs to a record low on Thursday to support a deteriorating euro zone economy and complement measures agreed by government leaders last week to tackle the bloc's debt crisis. DAX and FTSE gained 0.4% and 0.2% respectively while CAC remained flat with a positive bias.
Back home, among the sectoral indices, Capital Goods, Bankex, FMCG and Power indices gained 1% each. Metal index turned flat with a negative bias.
Retail stocks rallied after a business daily reported the government may allow foreign investors to own majority stakes in domestic supermarkets and department stores after the Presidential elections on July 19. SOme of the major gainers were Koutons Retail up 15% along with Provogue, Shoppers Stop and Trent up 7-8%.
The top gainers among the Sensex stocks were Cipla, Maruti Suzuki, ICICI Bank, Jindal Steel, ITC, Tata Motors, BHEL and L&T up 1-2.5%
Among the losers were ONGC down over 2%, Bajaj Auto, Dr Reddys Lab and Sterlite Industries down 1% each.
The market breadth was positive. 1912 stocks advanced while 903 stocks declined on the BSE.