The 30-share BSE index was trading 233.20 points or 0.56 per cent higher at 41,692.99, and the broader NSE advanced 59.85 points, or 0.49 per cent, to 12,234.50.
All Sensex components were trading on a positive note with Asian Paints rising up to 1.33 per cent, followed by HDFC, HCL Tech, UltraTech Cement, Bharti Airtel and L&T.
In the previous session, Sensex settled 106.11 points or 0.26 per cent, lower at 41,459.79, and Nifty dropped 26.55 points or 0.22 per cent to close at 12,174.65.
Meanwhile, on a net basis, foreign institutional investors bought equities worth Rs 1,061.39 crore, while domestic institutional investors sold shares worth Rs 960.48 crore on Thursday, data available with stock exchanges showed.
According to traders, domestic equities advanced tracking significant foreign fund inflow ahead of the release of wholesale inflation data.
Globally, concerns over rising cases of coronavirus patients kept investors on edge, they said.
Bourses in Shanghai, Hong Kong and Seoul were trading on a positive note, while those in Tokyo slipped in the red.
Stock exchanges on Wall Street closed with losses on Wednesday.
Meanwhile, the rupee depreciated 5 paise against the US dollar to 71.31 in morning session.
Global crude benchmark Brent slipped 0.12 per cent to USD 56.27 per barrel. ANSANS