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The benchmark index maintained its optimism and hit fresh highs owing to ease in Red Sea issue and reversal of FII inflows, Vinod Nair, Head of Research at Geojit Financial Services, said on Thursday.

The markets closed at fresh highs on Thursday, the fifth consecutive day of gains, as Nifty closed at 21,778.70, up 0.57 per cent or 123.95 points, while Sensex ended 0.52 per cent or 371.95 points higher at 72,410.38.

A decline in crude oil prices below $80 a barrel prompted widespread purchasing across oil and energy companies. The Asian market too advanced due to an expectation of more aggressive rate cuts by the US Fed next year. The global market is largely experiencing consolidation due to valuation concerns, Nair said.

Forged component maker Azad Engineering made a strong entry into the stock market on Thursday, as it listed for Rs 720 per share, which is a significant 37 per cent higher than its initial public offering (IPO) price of Rs 524, said Vaibhav Vidwani, Research Analyst at Bonanza Portfolio.

Most of the sectors closed in the green on Thursday.

Nifty Oil & Gas and Nifty Energy, which were up 2.06 per cent and 1.51 per cent, respectively, were the two sectors that did better on Thursday.

Oil prices stabilised on Thursday after falling sharply the previous session, and the anticipation of reduced volatility in the short-term boosted the oil and gas sector, despite the escalating Middle East tensions and fears about shipping disruptions along the Red Sea route, Vidwani said.

FII inflow continued in the Indian market as MSCI undertook quarterly rebalancing with the likes of Bajaj Finance, Power Grid, ICICI Bank seeing the highest inflows, he said.