Mumbai: After a day's pause, benchmark Sensex resumed its upward march by regaining almost 109 points to end at new 16-month high of 28,532.11 and the broader NSE Nifty reclaimed the 8,800-mark, driven by auto stocks on upbeat August sales data amid positive global cues.
Though, investors remained cautious awaiting US jobs data to be released later in the day which would give cues about whether the Federal Reserve goes for early rate hike or not.
On a weekly basis, the Sensex climbed 749.86 points or 2.69 percent and the NSE Nifty soared 237.10 points or 2.76 percent, biggest weekly gains in over two months.
Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services Ltd, "Though markets were subdued early in the day, the recovery in telecom stocks from yesterday?s panic fall helped indices swing higher. Auto and banks continued the uptrend, and broader market sentiments remained upbeat towards better growth in the second half of the year."
"To that end, it seemed as if markets were less worried about impending US non-farm payrolls data and the potential of a September rate hike from US," he added.
The rupee strengthening by 10 paise to 66.85 (intra-day) against the dollar during the day also positively impacted trading sentiment.
Country's largest carmaker Maruti Suzuki emerged as top gainer in the auto segment, surging 1.98 percent to Rs 5,158.50 after the company yesterday posted a 12.2 percent rise in total sales for August.
Also, shares of Auto major Mahindra and Mahindra rose 1.17 percent to Rs 1,468.85 after the company reported a 14 percent rise in total sales to 40,591 units in August.
Hero MotoCorp, country's largest two-wheeler maker's stock, gained 0.89 percent to Rs 3,578.55 after the company reported a 28 percent increase in sales at 6,16,424 units in August, while Bajaj Auto rose 0.11 percent to Rs 2,999.85 despite the company reported a 5 per cent decline in its total sales in August.
Tata Motors too evoked sizeable buying support and gained 1.13 percent to Rs 549.80 after its sales in August jumped 6 percent to 43,061 units.
Telecom stocks such as Bharti Airtel, Idea Cellular and Reliance Communication staged a comeback after yesterday's plunge, rising up to 2.66 percent.
Telecom stocks suffered huge losses in yesterday's trade after Mukesh Ambani announced the launch of much-talked about Jio 4G service, offering free voice calls and national roaming.
The 30-share Sensex started off on a strong footing and advanced further as buying pace gathered momentum to hit a high of 28,581.58, before settling 108.63 points, or 0.38 percent, higher at 28,532.11, its highest level since April 16 last year when it had closed at 28,666.04.
Yesterday, the index had lost 28.69 points for the first time in four as investors booked profits in recent gainers.
The NSE Nifty gained 35 points or 0.40 percent to close above the 8,800-mark for the first time since April 13, 2015 at 8,809.65. It shuttled between 8,824.10 and 8,768.20.
Elsewhere, Asian stocks mostly closed higher and a better opening of the European stocks ahead of the US jobs data influenced sentiments here.
Asian indices like Hong Kong, South Korea and China's Shanghai Composite Index gained by up to 0.45 percent.
European indices like London, France and Germany rose up to 0.5 percent.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 301.51 crore yesterday, as per provisional data released by the stock exchanges.
In the 30-share Sensex pack, 22 scrips ended higher while 8 scrips closed lower.
Major gainers were Adani Ports (3.55 percent), Sun Pharma (1.50 percent), HDFC Ltd (1.13 percent), SBI (1.03 percent), ONGC (0.97 percent), Lupin (0.97 percent), Dr Reddy's (0.79 percent), ITC (0.71 percent) and NTPC (0.69 percent).
However, Shares of Coal India fell by 1.64 percent followed by RIL 1.58 percent, Hind Unilever by 0.73 percent, Infosys 0.64 percent and Power Grid 0.49 percent.
Among the BSE sectoral indices, auto rose the most by 1.01 percent followed by infrastructure 0.98 percent, realty 0.95 percent, healthcare 0.69 percent, power 0.61 percent and bankex 0.55 percent, while metal fell by 0.29 percent, IT 0.21 percent and capital goods 0.10 percent.
In sync with general trend, broader markets too displayed a bullish trend with the mid-cap and small-cap indices rising by 0.49 percent and 0.36 percent, respectively as investors widened their bets.