Indian shares closed up 5.51 per cent on Thursday on hopes that the central bank could lower interest rates as inflation eased further, dealers said.
The benchmark 30-share Sensex rose 482.32 points to 9,229.75.
"With inflation easing further, the RBI could lower rates. Improving global clues aided sentiment," said a dealer
with brokerage Prabhudas Lilladher.
India's inflation rate hit a seven-month-low of 8.4 per cent, according to official data released earlier on Thursday, giving the central bank more room to cut interest rates to stimulate flagging economic growth, analysts said.