The 30-share Sensex ended 271 points higher to end at 28,930 and the 50-share Nifty climbed 76 points to close at 8,776.
Meanwhile, sentiments also got boosted after the International Monetary Fund (IMF) said India's economy was recovering and its ability to withstand external shocks had improved, although it noted growth is likely to fall short of government targets.
The 30-share Sensex ended 271 points higher to end at 28,930 and the 50-share Nifty climbed 76 points to close at 8,776.
Technical analysts say that the Nifty faces resistance at 8,800 levels.
A breach, however, can take the index upto 8900 levels.
"Last traded week, Nifty gave the breakout of bullish triangle on 04 March on the back of key rate cut by RBI. It couldn’t hold the high level and is continuously trading lower.
From the last two trading sessions, Nifty has been taking support around 8670-8680 levels, which is around the 50EMA (8674) on daily chart.
So, 8670 would act as good support for coming days.
Any breakdown can open the door for further downside upto 8540 levels.
On the contrary, 8800 seen as good resistance for the near term, breakout can stretch the move upto 8900 levels," said Mudit Goyal, technical analyst with SMC Global Securities.
Investors would keenly await data on industrial production for January and consumer price index for February scheduled to be announced after market hours today.
In an annual report, the IMF forecast that Asia's third-largest economy would grow by 7.5% in the 2015/16 fiscal year that starts on April 1, up from 7.2% in the year now ending. According to Moody's Analytics, a research arm of the Moody's group, IIP for the month of January is expected to grow at 2%, marginally higher than 1.7% in December.
But according to a Reuters poll of 24 economists, industrial output is expected to slow down to 0.65%. "Markets recovered today on the back of buying after the continuous sell-off in the past few trading sessions. Also, the positive Asian markets provided support.
The Asian front was up on the new of a record low interest rate by the South Korean central bank," said Alex Mathews, head of research, Geojit BNP Paribas Financial Services Meanwhile, foreign institutional investors were net sellers in equities to the tune of Rs 445 crore on Wednesday as per provisional stock exchange data.
RUPEE
The rupee fell by six paise to a fresh two-month low of 62.82 against the US dollar today at the Interbank Foreign Exchange due to rise in the Greenback's value against other global currencies.
KEY STOCKS
On the sectoral front, all sectoral indices ended in the positive territory with BSE Power, FMCG, Auto, Metal, Healthcare and Consumer durables gaining up to 1.5%.
Cigarette maker and Index heavyweight ITC gained over 2% amid media reports that the company has raised the prices by 10-25 percent across key cigarette brands.
Consumer Durables stocks ended firm ahead of the CPI data due later during the day.
Rajesh Export, Symphony, Titan, Whirlpool India ended higher up to 5%. Capital goods ended in the positive territory ahead of the IIP data due to be released later during the day, L&T gained 0.5% and BHEL surged 2.5%.
BHEL has achieved one more milestone by successfully commissioning another 270 MW coal based thermal power plant in Maharashtra. SBI and ICICI Bank were up between 0.5-2%.
These banks having insurance subsidiaries gained on expectations that the insurance amendment Bill will be passed by the Rajya Sabha later today.
Responding to media reports which suggested that ICICI Bank is in talks to sell 5% stake in insurance unit-ICICI Prudential for around $300 million by March end, the bank has said that no such material development which would reporting under clause 36 of the listing agreement has taken place.
NTPC gained around 4% and emerged as the top gainer after the company announced that it has fixed March 23, 2015, as the record date for bonus debentures.
Metal stocks rebounded from yesterday's lows. Sesa Sterlite gained over 2.3% and Tata Steel advanced around 2%.
Hindalco rebounded after the sharp fall on Wednesday following a scrutiny over the coal block allocations. The stock was up nearly 3.5%.
Shares of Jindal Stainless surged over 11% to Rs 45 following reports that the government is planning to impose anti-dumping duty on hot rolled flat stainless steel.
Shares of companies having insurance subsdiaires including Max India, Reliance Capital, Exide Industries, Aditya Birla Nuvo and Bajaj Finserv hogged focus and ended higher by up to 11% on the bourses as media reports suggest that the Congress will not vote against the insurance bill in Rajya Sabha which seeks to raise the foreign direct investment (FDI) cap from the existing 26% to 49%.
On the losing side, Dr Reddy's Lab, Coal India, M&M and Bajaj Auto were down between 0.7-1.5%. In the broader market, both the BSE Midcap index and Smallcap index gained 1% each.
Market breadth on the BSE was positive with 1,664 advances against 1,225 declines.
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