Equity benchmarks closed sharply higher for the second consecutive session as investors cheered macro data and hopes raised for an early resolution to telecom NPAs post telecom deals.
The 30-share BSE Sensex was up 250.47 points at 32,432.69 and the 50-share NSE Nifty rose 71.10 points to 10,167.50.
The market breadth was weak as about 1,431 shares declined against 1,293 advancing shares on the BSE.
Bharti Airtel was up 6 percent, Tata Teleservices up 9 percent and Tata Communications up 2 percent after Airtel decided to buy consumer telecom business of Tata Sons. Bharti Infratel was up 3 percent.
Markets also got a boost after data showed inflation held steady, instead of accelerating as expected, raising tentative hopes the Reserve Bank of India (RBI) would be less hawkish about interest rates.