Further, the Cabinet approval for 49% foreign investment in insurance companies through the FIPB route also aided sentiment.
The 30-share Sensex ended at 26,272 up 125 points and the 50-share Nifty ended at 7,831 up by 35 points.
Bse Midcap index lost 0.2%, whereas BSE Smallcap index inched up 0.2%.
Both Sensex and Nifty slipped in red in the morning and traded in a narrow range during the noon. However, recovery from lower levels was staged in the last hour of trade led by buying in banking, metals, FMCG and technology stocks.
Across the Globe
European stocks edged up too after digesting Markit's Composite Purchasing Managers' Index of companies across the euro zone and a good early indicator of overall growth.
The overall index rose to 54.0 in July from 52.8, its highest since April. Any number above 50 indicates expansion.
FTSE 100, CAC 40 and DAX indices rose between 0.14-1%.
The HSBC flash PMI for China, the world's second-largest economy, came in at 52.0 for July, well above forecasts and the highest reading in 18 months.
There was also good news on the outlook, with a sub-index of new orders reaching 53.7.
Japan’s Nikkie dipped 0.2%. However, Straits Times Index is up 0.3%, Hong Kong'Hang Seng Index jumped 0.7% and Shanghai Composite Index surged 1.3%.
Back Home
Rupee was trading at 60.10/11 versus its previous close of 60.0925/1025, as dollar demand from importers hurts the Indian unit.
Meanwhile, Foreign investors bought Indian shares worth 6.52 billion rupees on Thursday, provisional exchange data showed.
Sectors & Stocks
On the sectoral front, BSE IT and Metal indices lead the rally up over 1%, followed by Teck and FMCG indices.
Bankex closed up nearly half a percent. In contrast, BSE Oil and Gas, Consumer Durables, Health Care indices lost between 0.3-1%. BSE Auto ended flat with a negative bias.
Shares of metal companies are trading firm in an otherwise subdued market after a preliminary gauge of Chinese manufacturing activity reached an 18-month
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