Heightened chances of key economic legislations getting passed during parliament's winter session coupled with hopes of a stimulus package for European Union buoyed the Indian equity markets on Thursday.
Initially, both the bellwether indices of the Indian equity markets opened on a weak footing but gained strength in line with their Asian and European peers.
Furthermore, better-than-expected outcome of the derivatives expiry and minor short covering supported the bellwether indices to break their two days of losses.
The barometer index slipped by 93 points during the last two trading sessions.
On Thursday, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed 183 points or 0.71 percent up during the day's trade.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the day's trade. It rose by 52.20 points or 0.67 percent to 7,883.80 points.
The S&P BSE Sensex, which opened at 25,769.81 points, closed at 25,958.63 points -- 182.89 points or 0.71 percent up from the previous day's close at 25,775.74 points.
The Sensex touched a high of 26,016.04 points and a low of 25,769.81 points during the intra-day trade.
Market observers said positive bias emanating from hopes of the Goods and Services Tax (GST) Bill securing passage during the winter session of parliament buoyed the equity markets.
"The positive bias in the day's trade eminated from expectations that a breakthrough can be achieved on the GST bill and that it can get passed in this session," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
Markets were optimistic over GST Bill getting through this session after Finance Minister Arun Jaitley said that he spoke to Congress leaders over the issue and was confident that the key reform measure will be passed.
The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline.
Besides the GST, hopes of European Central Bank (ECB) announcing a stimulus package during its next monetary policy meet slated for December 3 and rising European stocks gave a positive cue to Asian and Indian markets.
"Sentiments turned mildly positive, helped by strong European markets, which were buoyed by expectations of ECB stimulus packages," James added.
Even the better-than-expected rollover rate during the derivatives expiry despite the reduction in lot size in futures and options (F&O) segment by the Securities and Exchange Board of India (SEBI) has restored confidence of the investors.
Indian benchmark indices terminated November F&O series on a strong note with gains of around 0.7 percent.
"With the F&O expiry out of the way today, we expect some bit of buying to emerge in the coming sessions," Vaibhav Agarwal, vice president and research head at Angel Broking, told IANS.
Nevertheless, rupee weakened in the day's trade by 24 paise at 66.57 to a US dollar from its previous day's close of 66.33 to a greenback.
The foreign institutional investors (FIIs) were net sellers in the day's trade at stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers.
According to data with stock exchanges, FIIs sold stocks worth Rs.398.1 crore, while DIIs bought stocks worth Rs.948.98 crore.
Nitasha Shankar, vice president for research with YES Securities, told IANS: "Broader markets outperformed amidst strong market breadth in favour of the bulls with 1,610 advances and 1,058 declines."
Sector-wise during the day's trade, automobile, consumer durables and oil and gas indices gained, while healthcare and capital goods indices came under selling pressure.
The S&P BSE automobile index augmented by 239.95 points, consumer durables index gained by 127.32 points and oil and gas index was was higher by 83.40 points.
The S&P BSE healthcare index receded by 87.03 points and capital goods dived-lower by 33.72 points.
Major Sensex gainers during Thursday's trade were Tata Motors, up 5.51 percent at Rs.423.15; Sun Pharma, up 3.96 percent at Rs.735.95; Gail, up 3.33 percent at Rs.367.70; Mahindra and Mahindra, up 2.06 percent at Rs.1,345.10; and Reliance Industries, up 2.04 percent at Rs.987.70.
The major Sensex losers were Dr.Reddy's Lab, down 8.21 percent at Rs.3,110.35; Lupin, down 1.24 percent at Rs.1,837.35; Tata Consultancy Services (TCS), down 1.05 ercent at Rs.2,345.15; Bajaj Auto, down 0.66 percent at Rs.2,462.40; and Maruti Suzuki, down 0.63 percent at Rs.4,611.40.
