The Nifty fell 84.5 points in the intra-day trade from its days high of 10,594.20 amidst heavy selling in bank and auto sector stocks.
The 30-share barometer was trading higher by 93.37 points, or 0.27 percent, at 34,425.05, with banking, IT, infrastructure and capital goods stocks leading the trend.
Gains across broader Asian stock markets also boosted sentiment, with MSCI's index of Asia-Pacific shares outside Japan up 0.5 percent.
Information technology stocks bounced back from recent losses with the NSE IT index up more than 1 per cent and TCS gaining almost 1 per cent.
The 30-share index moved higher by 110.13 points, or 0.32 percent, to 34,505.19.
Market breadth was negative with 1,245 advances against 1,170 declines.
On NSE, the major gainers were Power Grid, NTPC and Hindustan Unilever, while the top losers were Wipro, Tata Motors and Sun Pharma.
The Nifty IT index closed up a percent on depreciation in the rupee and ahead of TCS earnings later in the day.
In global markets, China and Hong Kong stocks extended gains on Thursday, helped by robust gains in resources firms, as rising oil prices aided a rally across commodities.
Information technology stocks bounced back from recent losses with the NSE IT index rising 1.14 percent.
Meanwhile, foreign institutional investors sold scrips worth Rs 915.71 crore, while the domestic institutional investors bought stocks worth Rs 869.70 crore, provisional data with the exchanges showed.
The Dow ended down 0.16 percent, while the S&P 500 gained 0.08 per cent and the Nasdaq 0.19 per cent.
The rupee on Thursday depreciated 15 paise to 65.81 against the United States dollar in opening trade at the interbank forex market today on increased demand for the greenback from importers and banks amid soaring crude oil prices overseas.