Consequently, both the key equity indices ended the day's trade in the green, as healthy buying was witnessed in banking and healthcare sectors.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up 49.20 points or 0.57 per cent to 8,673.25 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,077.64 points, closed at 28,123.44 points -- up 118.07 points or 0.42 per cent from the previous close at 28,005.37 points.
The Sensex touched a high of 28,214.17 points and a low of 28,077 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bulls -- with 1,670 advances and 1,017 declines.
On Wednesday, the benchmark indices had closed in the red on the back of negative global cues and profit booking.
The barometer index had closed lower by 59.24 points or 0.21 per cent, while the NSE Nifty slipped by 18.50 points or 0.21 per cent.
Initially on Thursday, both the key indices opened on a higher note prompted by positive cues from Asian and the US markets.
The investors' sentiments were also boosted by the decision of the US Federal Open Market Committee (FOMC) to maintain its key lending rates.
Moreover, positive comments from global credit rating agency Moody's Investor Service buoyed the equity markets.
The rating agency in its latest assessment of the global economy retained India's growth forecast at 7.5 per cent for 2016 and said that the outlook for emerging market economies has stabilized.
In addition, short covering and value buying at lower levels aided the key indices to sustain the upward movement.
However, the rupee weakened by 4-5 paise to 66.81-82 against a US dollar from its previous close of 66.77 on Tuesday. The Indian currency market was closed on Wednesday on account of Parsi New Year.
"Global cues such as the FOMC's decision to maintain its interest rates lifted the domestic markets. Short covering has also lent support to prices," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"Declines were seen supported by value buying at lower levels. Besides, foreign institutional investors (FII) have been continuously on the buying side for the last couple of days, which has extended the support to the Indian markets."
Dhruv Desai, Director and Chief Operating Officer of Tradebulls said the markets closed positive with banking and pharma stocks taking the lead.
"IT sector, because of concern of slowdown in Europe and Brexit, were languishing," Desai stated.
"Steel sector witnessed fresh selling after concerns of slowdown and India slapping anti-dumping duty on certain cold-rolled flat steel products from four nations including China and South Korea to guard domestic industry from cheap imports."
In terms of investments, the provisional data with exchanges showed that the FIIs purchased stocks worth Rs 162.17 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 14.42 crore.
Sector-wise, the S&P BSE banking index augmented by 358.34 points, followed by the healthcare index, which surged by 114.56 points, and the oil and gas index rose by 81.19 points.
On the other hand, the S&P BSE capital goods index declined by 63.88 points, the consumer durables index fell by 58.88 points, and the metal index slipped by 55.30 points.
Major Sensex gainers during Thursday's trade were: Power Grid, up 4.24 per cent at Rs 181.95; NTPC, up 3.50 per cent at Rs 167.20; Adani Ports, up 2.91 per cent at Rs 274.40; ICICI Bank, up 2.24 per cent at Rs 252.85; and Bharti Airtel, up 2.07 per cent at Rs 352.40.
Major Sensex losers were: Coal India, down 2.59 per cent at Rs 338.80; Larsen and Toubro (L&T), down 1.29 per cent at Rs 1,482.65; Gail, down 1.08 per cent at Rs 365.60; Tata Steel, down 1.06 per cent at Rs 387.20; and Infosys, down 0.88 per cent at Rs 1,024.30.
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