India's benchmark share market index finished over one percent higher Thursday, extending its gains to the fourth consecutive session, on large-scale buying in stocks of banking companies.

The stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 6,359.65, representing a gain of 70.10 points or 1.11 percent over its previous session's close.

Dealers said the stock market opened for the day with a wide positive gap as investors rushed to pick up shares of private banks following unveiling of favourable guidelines for the sector.

The market index kept surging higher for better part of the trading session on large-scale institutional buying interest in shares of heavyweight new as well as old economy companies.

"The stock market rally today was led by banking stocks. Most of the private bank counters touched their upper circuit limit on massive buying interest," said an analyst with a domestic brokerage firm.

"With the market index rising for the fourth consecutive session, the positive buying sentiment has returned into the trading ring. The uptrend is likely to continue in the days ahead," added the analyst.

The government late Wednesday gave its approval to a proposal to remove a 10 percent ceiling on voting rights for non-founding shareholders. The move is likely to facilitate consolidation in the sector.

Experts say the removal of the 10 percent ceiling would also make investments in the banking sector and acquisition of Indian banks more attractive to overseas banks.

Shares of Bank of Baroda gained nearly 10 percent to touch Rs.192, Bank of India was up 8.4 percent at Rs.98.30, and Canara Bank closed with a gain of 7.4 percent at Rs.188.75.

Public sector energy giant Oil and Natural Gas Corp rose 2.7 percent to Rs.858.95 after the company announced that it has registered three new oil and gas finds.

Shares of auto companies such as Bajaj Auto gained 2.1 percent to Rs.1,109, largest motorcycle maker Hero Honda Motors was up nearly two percent at Rs.539.80 and biggest carmaker Maruti Udyog ended 0.6 percent higher at Rs.416.

In the technology sector, shares of Infosys Technologies, the country's second largest software exporter, gained 3.4 percent to touch Rs.2,003.95 and Bangalore-based marquee software maker Wipro rose 0.8 percent to Rs.635.80.