Benchmark indices extended gains for second straight session with the Sensex rising more than 2000 points and Nifty hitting 9,700 for the second time on the back of strong recovery in PSU banks. Hopes of positive quarterly earnings and -free roll-out of the goods and services tax (GST) also lifted sentiment.
On the contrary, most Asian stock markets fell on Thursday after minutes from the Federal Reserve's last meeting showed a lack of consensus on the future pace of US interest rate increases, while oil prices inched higher following a steep decline a day earlier.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%. Japan's Nikkei slipped 0.5% as a stronger yen depressed the outlook for export earnings.
At 2:20 pm, the S&P BSE Sensex was trading at 31,458, up 212 points, while the broader Nifty50 was ruling at 9,698, up 60 points.
The broader markets continued to rally on strong breadth with S&P BSE Smallcap index hitting a fresh record high 15,866.14. The index has already rallied over 30% so far in the year 2017 compared to near-18% rally seen in the S&P BSE Sensex. The smallcap index was currently trading 0.7% higher while BSE Midcap was up 0.6%
Nifty PSU Bank index rose nearly 3% after brokerage houses upgraded leading PSUs Bank of Baroda and Punjab National Bank as valuations turned reasonable after recent correction on NPA concerns. The index advanced for a second session, with Canara Bank and Syndicate Bank up more than 3% each.
Shares of Punjab National Bank jump as much as 4.4% to post their biggest intraday percent gain since May 16 after Nomura upgraded the stock to 'Buy' from 'Neutral' on Wednesday while Bank of Baroda gained 2%
Tata Motors gained more than 1% on Jaguar Land Rover sales.
IRB Infrastructure Developers shares rose 3% after its special purpose vehicle Udaipur Tollway Private Limited has successfully achieved financial closure for Udaipur-Gujarat border 6 laning BOT (build-operate-transfer) project.
ITC, which was down in the last two sessions, rose as much as 2.3% after it reduces prices of its FMCG products passing on GST benefits to its consumers.