Benchmark BSE Sensex climbed 123 points while broader Nifty settled above 25,000 on Thursday, tracking a rally in global peers amid Fed rate cut hopes.

Rallying for the fourth day in a row, the 30-share Sensex climbed 123.58 points or 0.15 per cent to settle at 81,548.73. During the day, it rallied 217.07 points or 0.26 per cent to 81,642.22.

The 50-share NSE Nifty rose by 32.40 points or 0.13 per cent to close at a nearly three-week high of 25,005.50, marking its seventh consecutive day of gains. Among Sensex firms, NTPC, Axis Bank, Power Grid, Bharti Airtel, Eternal and Sun Pharma were the major gainers.

However, Infosys, Titan, UltraTech Cement and Hindustan Unilever were among the laggards.

"The Nifty50 index has closed above the critical threshold of 25,000. The unexpected imposition of a 50 per cent tariff on India by the US initially dragged the main index down to 24,400," Vinod Nair, Head of Research, Geojit Investments Limited, said.

Positive signals from the US to resume trade discussions with India have further paved the way for the index to ascend into a new range, which was highly expected by the market, Nair added.

"Markets traded in a subdued manner on Thursday and ended marginally higher, taking a breather after the recent surge. After a positive start, the Nifty moved in a narrow range throughout the session and finally settled at 25,005.5 level," Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

Sectoral performance was mixed, with energy and pharma emerging as top gainers, while IT and auto witnessed profit booking, Mishra added. The BSE midcap index gained 0.14 per cent while Smallcap index ended flat.

Among sectoral indices, oil & gas (1.19 per cent), power (1.06 per cent), energy (0.96 per cent), utilities (0.95 per cent), services (0.59 per cent) and telecommunication (0.55 per cent) were the gainers.