The Sensex and the Nifty rose to their highest level in nearly 2-1/2 weeks on Thursday as technology stocks such as Tata Consultancy Services
Domestic stocks gained late in the trading hours after European shares edged higher on expectations the European Central Bank could point to future policy easing after its rate-setting meeting.
But at home, investors are focusing on key inflation and industrial output data due next week, which will be crucial ahead of the RBI's policy review on March 19. Any additional fiscal measures by the government will also be eyed.
"The markets at the moment are centred around global central bank policy meetings and RBI policy on March 19, for which the market is pricing in some rate cuts," said Brenda Kelly, Market Strategist at IG Markets.
"ECB and BOE meetings would give us cues to what happens not just globally but in India as well, for the near to medium term," added Kelly.
The Sensex rose 0.84 percent, or 160.93 points, to end at 19,413.54, the highest close since February 20, after having touched a three-month low on Monday.
The Nifty rose 0.77 percent, or 44.70 points, to end at 5,863.30, adding 2.9 percent in three sessions.
Traders bet improving global environment for Indian technology companies, which derive nearly 70 percent of their revenues from the United States and Europe, will translate into a pickup in demand that can in turn improve margins.
Hero MotoCorp Ltd
Among recent outperformers that fell, Tata Steel
Cement companies fell on concerns over poor growth and low demand, especially after the sector's third quarter earnings failed to impress the market.