The Sensex and Nifty ended higher by nearly 0.3 per cent due to covering-up of pending short positions by speculators on the expiry of the August derivatives contracts in the last hour of trade.
However, investors adopted a cautious approach ahead of GDP data for the April-June quarter to be released later in the evening.
The 30-share BSE index Sensex ended higher by 84.03 points or 0.27 per cent at 31,730.49 and the 50-share NSE index Nifty closed up 33.5 points or 0.34 per cent at 9,917.90.
Among BSE sectoral indices, realty index gained the most by 1.11 per cent, followed by power 0.76 per cent, consumer durables 0.59 per cent and oil & gas 0.55 per cent. On the other hand, healthcare index fell 0.47 per cent, banking 0.13 per cent, and metal 0.07 per cent.
Top five Sensex gainers were Wipro (+2.54%), Bajaj Auto (+2.24%), Reliance (+1.88%), Maruti (+1.67%) and Cipla (+1.44%), while the major losers were Coal India (-1.45%), Infosys (-1.22%), M&M (-1.13%), ONGC (-1.01%) and Dr Reddy's (-0.98%).
Asian shares
Investors rediscovered a taste for the dollar and Asian shares on Thursday as upbeat Chinese and US economic news whetted appetite for riskier assets globally, even as tensions over North Korea simmered in the background.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent, leaving it a modest 0.7 per cent firmer for the month so far.
US stocks rose on Wednesday after stronger-than-expected US economic growth outweighed concerns about escalating tensions between the United States and North Korea and uncertainty in the aftermath of Hurricane Harvey.
The Dow Jones Industrial Average rose 27.06 points, or 0.12 per cent, to end at 21,892.43, the S&P 500 gained 11.29 points, or 0.46 per cent, to 2,457.59 and the Nasdaq Composite added 66.42 points, or 1.05 per cent, to 6,368.31. The Nasdaq closed within 1 per cent of its record closing high set in late July.