Indian stock markets recovered from earlier losses and turned positive after Mayawati announced that BSP will vote in favour of Foreign Direct Investment in multi-brand retail in the Upper House.
The 30-share BSE Sensex gained 0.49 percent or 94.94 points to 19,486.80 and the 50-share NSE Nifty rose 0.52 percent or 30.40 points to 5,930.90, the highest level in more than 20 months.
Markets were trading in negative territory in the morning session despite the government's victory in the retail FDI vote in the Lower House of Parliament on Wednesday as investors remain cautious over the vote in the Upper House.
BSE Sensex recovered more than 200 points after BSP Chief Mayawati said she will support the Government. Firm trend in European shares also added to the sentiment. European shares were trading higher with London's FTSE 100 was up 23.06 points, Germany's DAX 30 index rose 89.68 points and France's CAC 40 gained 22.56 points.
Among the sectoral indices, realty, banking and power sectors surged more than 1.5 percent while IT and technology sectors declined 1.41 and 1.10 percent respectively.
Shares in the IT sector plunged after Cognizant Technology Solutions in a filing to the SEC on Tuesday said it will pay its senior executives 100 percent of performance-linked stock units if sales expand 16 percent in 2013, suggesting that its fiscal 2013 growth would be lower than the company's outlook for fiscal 2012.
The overall market breadth was positive with 1600 advanced against 1297 declines. The BSE's Midcap Index gained 0.73 percent to 7,075.92 and Smallcap Index advanced 0.46 percent to 7,453.77. CNX midcap Index gained 0.88 percent and CNX IT declined 1.39 percent.
Asian stock markets were mixed Thursday after U.S. President Barack Obama made a positive comment on the fiscal cliff Wednesday. Sentiment turned positive overnight after President Barack Obama commented that a deal to avert the fiscal cliff was possible in a week provided the Republicans were favoring a tax increase on the wealthiest Americans.