The BSE Sensex advanced today to close 0.17%, or 45.82 points, higher at 26,360.11. The National Stock Exchange's broader barometer CNX Nifty gained 0.20%, or 15.80 points, to close the day at 7,891.10.

Bajaj Auto Ltd jumped 3.32% to Rs.2,271, State Bank of India (SBI), added 2.27% to Rs.2,467.80 and Sun Pharmaceutical Industries Ltd advanced 1.75% to Rs.861.95.

On the other hand, NTPC Ltd plunged 1.86% to Rs.142.65, Sesa Sterlite Ltd fell 1.73% to Rs.289.65, while Tata Steel Ltd declined 1.62% to Rs.536.60. The shares of these companies fell after the government approved the plan to raise the royalty rates on minerals, including iron ore and bauxite.

The S&P; BSE Consumer Durables index was the biggest sectoral gainer, moving ahead 3.78%, followed by S&P; BSE Bankex that added 1.18%.

Meanwhile, Finance Secretary Arvind Mayaram today said that the country's economy will expand around 5.8% in the current fiscal year. Mayaram's statement asserts the belief that the economy would recover strongly this year.

"There is an uptick in core industrial sector and recent indicators such as sales of passenger vehicles and the Purchasing managers index are also pointing to a recovery," he said.

The market is gaining strength amid hopes that the new BJP-led government would soon take some important pro-business measures to boost the economy.

Indian economy is the third largest in Asia and it grew just 4.7% in the fiscal year ended March 31. This is the first time in the last twenty five years that the economy registered under 5% growth.