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At 9:42 am, the Sensex traded 185.06 points - or 0.45 per cent - higher at 41,300.44 while the Nifty was up 59.35 points - or 0.49 per cent - at 12,166.25.
Thirty seven stocks on the 50-scrip benchmark index traded higher at the time. Top percentage gainers were Larsen & Toubro, Axis Bank, Indian OIl, Infosys and Coal India, trading between 1.38 per cent and 3.49 per cent higher. On the other hand, Zee Entertainment, UPL, Power Grid, Asian Paints and Britannia - down between 0.40 per cent and 3.66 per cent - were the top Nifty laggards.
L&T, Axis Bank and Infosys were the top contributors to the gain in Sensex, together accounting for a rise of more than 100 points in the index.
Market breadth favoured gains, with 967 stocks trading higher against 458 moving lower on the BSE. On the NSE, 1,070 stocks advanced whereas 528 declined.
Axis Bank shares were in focus a day after the private sector lender reported a 4.53 per cent rise in net profit to Rs 1,757 crore for the quarter ended December 30, boosted by lower provisioning for bad loans.
Analysts awaited financial results by large cap companies for cues in the near term. Bank of Baroda, JSW Steel, UltraTech Cement and ICICI Bank will report their earnings for the quarter ended December 31 this week.
Equities in Asian markets fell on Thursday as investors remained anxious about the spread of a new flu-like virus in China just as millions prepared to travel for the Lunar New Year.
MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading 0.45 per cent lower. Blue chip Chinese shares fell 0.91 per cent, while Japan's Nikkei stock index was down 0.6 per cent. US stock futures in Asia fell 0.02 per cent.
On Wednesday, the S&P BSE Sensex index declined 208.43 points - or 0.50 per cent - to end at 41,115.38 and the broader NSE Nifty benchmark settled at 12,106.90, down 62.95 points - or 0.52 per cent - from its previous close.
That marked a third straight day of losses for the benchmark indices, a period in which the Sensex lost 829.99 points or 1.98 per cent.