Market benchmark Nifty rose further by 38 points, ending below 8650-level ahead of Budget following sustained buying mainly in banks, financial services, infra and energy stocks.
While FMCG, realty and media stocks showed weakness and pulled the index lower.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks as on Wednesday. Foreign portfolio investors (FPIs) had bought shares worth a net Rs 1,378.81 crore, as per provisional data.
Overseas, European stocks were trading lower, as markets paused following the previous session's strong gains and investors became more cautious on weekend.
Most Asian stocks rose after US benchmark indexes closed around all-time highs, as investors watch corporate earnings and economic reports to gauge whether the latest rally is justified.
The NSE 50-share Nifty index opened gap-up at 8,610.50 and hovered between 8,672.70 and 8,606.90 before closing at 8,641.25, a rise of 38.50 points, or 0.45 per cent.
It saw an intra-day movement of about 65.80 points.
On the sectoral front, PSU bank rose by (2.57 per cent) followed by financial services (1.62 per cent), banks (1.21 per cent), infra (1.30 per cent), private banks (1.03 per cent) and energy (0.69 per cent).
However, FMCG dipped by 1.84 per cent, realty 0.60 per cent and media 0.29 per cent.
Major index gainers were BHEL (5.84 per cent), ICICI Bank (4.64 per cent), Bharti Airtel (3.98 per cent), NTPC (3.59 per cent) and Bank of Baroda (3.55 per cent).
However, ITC fell 3.05 per cent, followed by Bosch Ltd (1.83 per cent), Lupin (1.77 per cent), Wipro (1.72 per cent) and Hindunilvr (1.52 per cent).
A total of 836 scrips declined, 820 advanced, while 66 remained unchanged. Total securities that hit their price bands were 134.
Turnover in the cash segment fell to Rs 24,587.82 crore, from Rs 30,629.07 crore yesterday.
A total of 12,942.37 lakh shares changed hands in 8,897,658 trades. The market capitalisation of NSE stood at Rs 11,184,067.22 crore.
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