A rally in energy and technology stocks propelled Indian shares to a firmer finish on Thursday, ending a four-session losing streak driven by worries around aggressive policy tightening by global central banks.

Notching their best session since the turn of the month, the NSE Nifty 50 index settled 0.74 per cent or 121.85 points higher at 16,478.10 and the S&P BSE Sensex rose 0.78 per cent or 427.79 to 55,320.28.

Both the indexes have been buffeted in recent weeks by fears that aggressive tightening of monetary policy to combat stubborn inflation could stifle economic growth.

In a widely expected move on Wednesday, the Reserve Bank of India raised its key rate by 50 basis points after an off-cycle hike last month and signalled further tightening ahead.

Leading the gains on Thursday, energy stocks on the Nifty Energy jumped 1.2 per cent as crude prices advanced on robust trade data from major oil consumer China.

The technology, pharma and infrastructure sub-indexes all closed up roughly 1 per cent each. Real estate stocks, which had declined as much as 1.4 per cent earlier in the session, closed up 0.26 per cent.

Globally, equities were lower ahead of a meeting of the European Central Bank where the ECB is expected to signal it is ready to raise interest rates for the first time in a decade.