The Sensex and Nifty ended higher by nearly one per cent on positive global cues after US Fed minutes suggested a less hawkish stance from policymakers.
Brokers said the domestic sentiment was buoyed due to value-buying in blue-chips and a firm trend in Asia boosted by overnight gains in the US. The US shares rose after minutes of Federal Reserve’s December meeting signalled a less aggressive stance on rate hike.
The benchmark BSE index closed up 245.11 points or 0.92 pe rcent at 26,878.24, after touching its highest level since November 11.
The broader NSE index ended up 83.3 points or 1.02 per cent at 8,273.8, after hitting its highest level since November 15.
Barring IT and TECk, all other BSE sectoral indices ended higher. Among them, metal index gained the most by 3 per cent, infrastructure 2.12 per cent, auto 1.84 per cent and oil & gas 1.79 per cent, while IT index was down 0.77 per cent and TECk 0.33 per cent.
Top five Sensex gainers were Adani Ports (+4.88%), Tata Steel (+3.47%), Tata Motors (+3.18%) ONGC (+2.73%) and Power Grid (+2.5%), while the major losers were TCS (-1.85%), HDFC Bank (-0.22%), Infosys (-0.19%) and NTPC (-0.03%).
Corporate earnings
Traders said the Indian market would ultimately be driven by corporate earnings, with Tata Consultancy Services and Infosys scheduled to post their quarterly results on January 12 and January 13, respectively.
India is also gearing up to its annual budget, and investors hope Prime Minister Narendra Modi's government would keep spending under control and promote growth after its move to ban higher-value banknotes paralysed large parts of the economy.
“The budget is expected to be fiscally disciplined, with hopes that the government may take measures to boost economic recovery post the demonetisation impact,” said Tirthankar Patnaik, India strategist at Mizuho Bank.
“The key driver for markets will be earnings growth. Due to the impact of demonetisation, we believe that earnings growth numbers will pare down initially.”
A report by SMC global said: " Asian stocks edged higher on Thursday, underpinned by a firm Wall Street after minutes from the Federal Reserve's December meeting suggested a less hawkish stance from policymakers. US shares ended higher on Wednesday even after minutes from the Federal Reserve's December meeting showed concerns that quicker economic growth under President-elect Donald Trump could require faster interest rate increases to ward off inflation.The FOMC minutes suggested a less hawkish stance from policymakers. However, the FOMC dot plots project three interest rate hikes in 2017. However, the market is less optimistic with Fed Fund futures pricing in two hikes as The FOMC minutes noted upside risk to growth forecasts and uncertainty over the level of fiscal stimulus."