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Markets have broken six day losing streak and have commenced the session on a higher note tracking positive global cues. Firmness in Asian markets and overnight strong rebound in US markets cheered the sentiments among investors.
The Federal Reserve offered a strong signal that it was on track to raise interest rates sometime next year, altering a pledge to keep rates near zero for a "considerable time" in a show of confidence in the US economy.
By 9:25, the Sensex was higher by 338 points at 27,049 and the Nifty gained by 103 points at 8,133 levels.
Investors are likely to react positively to progress on big-ticket policy reforms as the Cabinet on Wednesday approved the Constitutional Amendment Bill on the Goods and Service Tax (GST) and the Lok Sabha approved amendments to the Companies Act.
Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 1,636.36 crore on Wednesday, as per provisional stock exchange data.
Asian share markets rallied on Thursday after US stocks enjoyed their strongest session this year when the Federal Reserve sounded upbeat on the economy and promised to be patient in removing policy stimulus.
Nikkei has gained close to 2.5%, Hang Seng index is up around 1% while Shanghai Composite is down by 0.5%.
Wall Street rebounded after three days of declines after the Fed said it would adopt a "patient" approach to raising interest rates. Dow Jones Industrial Average gained around 1.7% while S&P 500 and Nasdaq Composite indices gained over 2% each.
US consumer prices recorded their biggest drop in nearly six years in November as gasoline prices tumbled, but that did not change views the Federal Reserve would start raising interest rates in mid-2015.
Back home, BSE Consumer Durables index has surged by over 3% followed by counters like Banks, Realty, Power and Capital Goods, all gaining between 2-3%. Infact, all the major BSE sectoral indices are trading in positive zone.
The main gainers on the Sensex are ICICI Bank, Hindalco, SBI, Sesa Sterlite, Tata Motors, Axis, Banks, L&T and BHEL, all rising between 2-3%.
The Reserve Bank of India (RBI) has imposed penalties on ICICI Bank and Bank of Baroda for violating Know Your Customer (KYC) and anti-money laundering norms.
Meanwhile, global rating agency Moody's today said the government's decision to reduce its stake in public sector banks to 52% is credit positive.
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices have gained by 2% each.
The market breadth in BSE remains healthy with 1,074 shares advancing and 135 shares declining.
