On a closing basis, the wider 51-scrip Nifty of the National Stock Exchange (NSE) touched a new 52-week high. The barometer 30-scrip sensitive index (Sensex) of the BSE also reached its highest closing levels in the last 11 months.
The NSE Nifty edged up 50.50 points or 0.59 per cent to 8,666.30 points.
The BSE Sensex, which opened at 28,108.78 points, closed at 28,208.62 points -- up 184.29 points or 0.66 per cent from the previous close at 28,024.33 points.
The Sensex touched a high of 28,240.20 points and a low of 28,064.90 points during the intra-day trade.
The BSE market breadth was slightly tilted in favour of the bulls -- with 1,474 advances and 1,185 declines.
On Wednesday, the benchmark indices ended on a flat-to-positive note due to speculative buying. The barometer index had gained 47.81 points or 0.17 per cent, while the NSE Nifty edged up 25.15 points or 0.29 per cent.
Initially on Thursday, the benchmark indices opened on a flat-to-positive note, despite a negative trend in the Asian markets.
Increased chances of the GST (Goods and Services Tax) Bill getting passed during parliament's ongoing monsoon session enhanced investors' risk-taking appetite.
Investors were hopeful about the bill's passage after the Union Cabinet on Wednesday approved key changes in the proposed legislation.
Government sources reported that the proposal for one per cent additional tax on inter-state sale had been dropped from the constitutional amendment bill.
The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority.
However, gains were capped due to negative Asian markets, especially the Japanese indices which fell ahead of the Bank of Japan's (BoJ) monetary policy review.
In addition, investors were spooked after the US Fed's FOMC (Federal Open Market Committee) gave signals of an upcoming rate-hike decision.
A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Short covering due to the F&O (Futures and Options) expiry triggered buying in the final hour of the day's trade which aided the equity markets to close on a higher note.
Appreciation in rupee's value, too, supported the upward trajectory. It strengthened by 10 paise to 67.04 against a US dollar from its previous close of 67.14 to a greenback.
"Increased chances of a rate hike in the US after the FOMC meet and negative Asian markets capped gains. However, higher chances of the GST Bill getting passed supported prices at lower levels," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, banking and pharma stocks traded with mixed sentiments.
"Most aviation sector stocks continued firm movement on lower crude oil prices," Desai noted.
In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 1,767.06 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 1,074.47 crore.
Sector-wise, the consumer durables index augmented by 281.68 points, followed by the automobile index, which surged by 168.42 points, and the healthcare index rose by 128.81 points.
In contrast, the S&P BSE capital goods index plunged by 132.57 points, followed by the metal index, which declined by 70.32 points, and the industrials index dipped by 13.58 points.
Major Sensex gainers during Thursday's trade were: Asian Paints, up 6.14 per cent at Rs 1,126.95; Maruti Suzuki, up 4.47 per cent at Rs 4,762.70; ITC, up 2.48 per cent at Rs 253.90; Sun Pharmaceuticals, up 1.99 per cent at Rs 823.80; and Power Grid, up 1.71 per cent at Rs 175.10.
Major Sensex losers were: Larsen and Toubro (L&T), down 1.51 per cent at Rs 1,576.95; Adani Ports, down 1.38 per cent at Rs 225.30; Tata Steel, down 1.30 per cent at Rs 350.30; Axis Bank, down 0.98 per cent at Rs 543.30; and Dr. Reddy's Lab, down 0.93 per cent at Rs 2,960.65.
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