India's main stock index topped 10,000 points on Thursday for the first time since Jan. 7, the day Satyam Computer unveiled the country's biggest corporate fraud and sparked a slide. The 30-share BSE index firmed 3.5 percent, extending a rally into the fourth day in a row, after unexpectedly strong U.S. data boosted hopes for a global economic recovery and propelled markets from Wall Street to Hong Kong and Japan higher. The rise was partly helped by hectic short covering on the last day of monthly derivative contracts and took the gains to almost a quarter from the 2009 low hit early this month. Lenders such as ICICI Bank and State Bank of India , engineering conglomerate Larsen & Toubro and energy giant Reliance Industries were among the top gainers. 'Indian markets will move in tandem with the U.S., Europe and rest of Asia,' said K.K. Mital, head of portfolio management services at Globe Capital in New Delhi. 'The extreme negative sentiment we saw over the past year or so is receding.' The BSE index closed up 3.47 percent, or 335.20 points, at 10,003.10, with 27 of its components advancing. The benchmark has risen 24.3 percent from its 2009 low of 8,047.17 on March 6, and is just 4.5 percent below the year's high of 10,469.72 on Jan. 7. The possibility of easier monetary policy to fight deflation in the coming months also underpinned the market. Data on Thursday showed inflation heading towards zero, with the wholesale price-based rate up 0.27 percent on March 14, the lowest annual reading on record for the current series. 'This number is slightly higher than what we expected, but the bigger trend of moving towards deflation by end-March or early April continues,' Sujan Hajra, chief economist at Anand Rathi Securities, said. 'Our sense is that the deflation in India will last for more than six months and there will be significant monetary easing during this period.' Government-run State Bank of India climbed 4.2 percent to 1,093.80 rupees, while private-sector rival ICICI Bank gained 2.3 percent to 374.20 rupees. Even though a rise in bond yields, caused by heavy government borrowing plans, will dent treasury gains at banks, advance-tax figures point to healthy quarterly earnings and gave investors confidence, traders said. Reliance Industries, which has the biggest weight in the main index, rose 2.2 percent to 1,566.55 rupees, taking gains this week to 17 percent. The energy giant, which is set to start pumping gas from its fields off India's east coast, will also commission all secondary units of a new refinery in a few weeks and expects to reach full capacity of 580,000 barrels per day by September. Tata Motors, which launched its ultra low-cost Nano this week, shrugged off a credit rating downgrade by Standard & Poor's and jumped 7.9 percent to 172.70 rupees. Bookings for the Nano are expected to soothe the company's funding woes. In the broader section, advancers led losers 1,400 to 1,143 on heavy volume of 411.4 million shares. The 50-share NSE index rose 3.3 percent to 3,082.25. Asian shares hit their highest level in 11 weeks on hopes the U.S. economic downturn may be easing. Japan's Nikkei rose 1.8 percent, while and MSCI's measure of other Asian markets gained 2.5 percent. New orders for long-lasting U.S.-made goods rose in February for the first time in seven months and new home sales rebounded, U.S. government data showed on Wednesday, suggesting the economic downturn might be easing a bit. MAIN TOP 3 BY VOLUME * Unitech on 37.1 million shares * Motherson Sumi Systems on 34.3 million shares * GVK Power & Infrastructure on 11 million shares STOCKS THAT MOVED * Havells India Ltd rose 14.8 percent to 147.40 rupees after a newspaper said the company targets $200 million worth of exports from its unit in Rajasthan and plans to make India the global manufacturing hub for compact flourescent lamps. * Motherson Sumi Systems Ltd gained 4.6 percent to 63.10 rupees after 34.17 million shares or 9.61 percent of its equity changed hands on the BSE in a block deal at 60.30 rupees each. * Phoenix Mills rose 7.5 percent to 62.65 rupees after about 1.68 million shares, or 1.15 percent of equity, changed hands in a block deal on the BSE at 59 rupees each. * Surana Industries hit the upper circuit of 10 percent at 77.25 rupees after the company said late on Wednesday its promoters have made an open offer to shareholders to acquire 4.3 million shares or 20 percent of equity at 154.6 rupees each.

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