Healthy buying was witnessed in banking, automobile and healthcare stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up 59.50 points or 0.69 per cent to 8,683.55 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,077.64 points, traded at 28,167.04 points (at 1.45 p.m.) -- up 161.67 points or 0.58 per cent from the previous close at 28,005.37 points.
The Sensex has so far 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 skewed in favour of the bulls -- with 1,610 advances and 865 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 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.
In addition, short covering and value buying at lower levels aided the key indices to sustain the upward movement.
"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.
"Falls were seen supported by value buying at lower levels. Besides, foreign institutional investors have been continously on the buying side for the last couple of days, which has extended the support to the Indian markets."
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