At 9:30AM, the 30-share Sensex was up227 points at 28,886 and the 50-share Nifty was up 66 points at 8,766. The Bank Nifty was up nearly 200 points at 19,235.

Investors would keenly await data on industrial production for January and consumer price index for February scheduled to be announced today besides keeping a tab on development regarding coal and mines related Bills and insurance amendment bills sent by the government to the Rajya Sabha

Technical analysts say that the Nifty has managed to hold the crucial support of 8,680 levels and has formed a reversal pattern on intraday charts; one can expect a short bounce as most of the technical indicators remain in the oversold territory. "It has an immediate support at 8,730 and on a decisive close above expect rise to 8,780& 8,830 levels," points out a morning note from Nirmal Bang.

Further, India's economy is recovering and its ability to withstand external shocks has improved, but growth is likely to fall short of government targets, the International Monetary Fund said on Wednesday.

In an annual report, the IMF forecast that Asia's third-largest economy would grow by 7.5% in the 2015/16 fiscal year that starts on April 1, up from 7.2 percent in the year now ending.

US stocks ended lower for a second straight session on Wednesday as worries grew about the timing of a Federal Reserve interest rate hike and dollar strength further dampened the outlook for US earnings.

The move followed the S&P 500's biggest one-day decline in two months in the previous session, which surpassed a selloff of similar magnitude on Friday.

The S&P 500 is now off 3.6% from its March 2 record closing high and is down 0.9% for the year so far. Friday's stronger-than-expected jobs report, which solidified views the Fed could raise rates as early as June, was largely behind the recent jitters.

The prospects of higher US interest rates buoyed the dollar but also kept share prices in many countries in check on Thursday, with Asian stocks hovering around seven-week lows.

The dollar's index against a basket of six major U.S. trader partners hit a 12-year high of 99.985 on Wednesday and last stood at 99.689.

Japan's Nikkei rose 0.4%, bolstered by hopes of buying from public investors such as the government's pension fund.

BSE Bankex and Power indices were the top sectoral gainers in early trades up nearly 1% followed by Capital Goods, Metal, Auto, FMCG, Consumer Durables, Oil and Gas among others. However, the IT index was marginally down.

Financials which have insurance subsidiaries were among the top Sensex after the government has sent the insurance amendment Bill to the Rajya Sabha. HDFC, ICICI Bank and SBI were up over 1% each.

Among the index heavyweights, Reliance Industries and ITC were among the top Sensex gainers.

In the broader market BSE Mid-cap and Small-cap indices were up 0.8% each.

Market breadth was strong with 1,144 gainers and 339 losers on the BSE.