The NSE's Nifty50 index ended at 11,972, up 62 points or 0.52 per cent. The Nifty Bank index climbed 409 points or 1.31 per cent to settle at 31,665 levels.
In the broader market, midcaps fared better than the frontline indices. The Nifty Midcap 100 index rallied 136 points or 0.82 per cent to end at 16,771.50. The Nifty SmallCap 100 index closed at 5,605, up 26 points or 0.47 per cent.
Sectorally, barring IT stocks all the other indices ended in the green. The Nifty Metal index climbed 2.36 per cent to settle at 2,569 while Nifty PSU Bank gained 2.23 per cent to 2,471 points.
Shares of Ujjivan Small Finance Bank (USFB) made a strong market debut on Thursday and listed at Rs 58, a 57 per cent premium against its issue price of Rs 37 per share on the BSE. The stock hit a high of Rs 62.80 apiece during the day. It finally settled at Rs 55.90 apiece.
YES Bank ended 6 per cent higher at Rs 45.35 apiece on the BSE. The Mumbai-based lender said its board failed to reach a final decision on potential investors at a meeting on Tuesday, though it favored a $500 million offer from Citax Holdings Ltd.
Shares of Aavas Financiers rallied 6 per cent on Thursday to hit a new high of Rs 1,949 on the BSE ahead of board meeting later in the day to consider fund raising via non-convertible debentures (NCDs). The stock eventually ended at Rs 1,915, up over 4 per cent.
Asian stocks rose on Thursday to the highest in a month after the Federal Reserve signalled rate settings were likely to remain accommodative, but the imminent UK election and a deadline for Sino-US trade talks kept investors cautious.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.98 per cent to the highest since November 11. Japan's Nikkei stock index rose 0.22 per cent and US stock futures edged up 0.1 per cent. Chinese shares slipped 0.2 per cent.
In Europe, shares rose slightly as investors awaited the outcome of a general election in Britain that will decide the fate of Brexit, as well as a policy meeting by the European Central Bank (ECB).
In commodities, oil prices rose after OPEC forecast a supply deficit next year.
(With inputs from Reuters)