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Benchmark indices have extended the gains on August F&O expiry led by capital goods, FMCG and financials shares.
Rupee has recovered after the central bank said it has started a facility to meet the daily dollar requirement of the country's three state-run refiners, with the latest RBI measure aimed at reducing currency market volatility.
At 12:45 PM, the 30-share Sensex gained 311 points at 18,307 and the 50-share Nifty added 92 points at 5,377 levels.
According to Sahaj Agrawal, Deputy Vice-President (Derivative Research), Kotak Securities, “Nifty has witnessed significant volatility pre-expiry and hence reduces the changes of a “big move” one would expect on expiry day. I would expect expiry to happen between of 5275-5325.”
On the global front, Asian shares recouped some of the two previous sessions' steep losses on Thursday as fears abated that US-led forces would soon launch a military strike on Syria, and oil prices retreated from a six-month peak.
Emerging market currencies stabilised after their recent battering, with the Indian rupee coming off a record low after the central bank moved to provide dollars directly to oil companies, offering the currency some relief.
Back home, the rupee rebounded on Thursday from a record low after the Reserve Bank of India's move to provide dollars directly to oil companies provided relief to the currency, while a recovery in emerging market currencies also helped offer support. At 12:30 PM, the Indian rupee was trading at 67.69against dollar.
On the sectoral front, BSE Capital Goods, Consumer Durables, Metal, Bankex, FMCG and Oil & Gas indices have surged by 2% each. Apart from Realty, all the major BSE sectoral indices are trading in green zone.
The main gainers on the Sensex at this hour include Sesa Goa, HDFC, Hindalco, Bharti Airtel, L&T, Tata Motors, Dr Reddy’s Lab and HDFC Bank, all surging between 2-8%.
Financial shares gain after steep losses in the previous two sessions are seen as overdone.
Shares of all three listed oil marketing companies (OMCs) - Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum are trading higher by over 2% in early morning deals after Reserve Bank of India (RBI) has opened a special window to meet the entire daily dollar requirements of these companies.
These three OMCs are the biggest buyers of dollars, requiring $8-8.5 billion every month, for the import of an average of 7.5 million tonnes of crude oil.
The market breadth in BSE remains positive with 1,091 shares advancing and 816 shares declining.
