The markets have witnessed a positive opening, this trading session, on back of positive global cues. The BSE Sensex is at 16,995, up 118 points and the Niftyis at 5,109, up 46 points.

Overnight, the US markets closed higher for a fourth consecutive day as bank stocks led the market higher following a coordinated effort by five central banks to help ward off a credit crisis in Europe.  The Dow Jones industrial average rose 1.6%, to 11,433. The S&P 500 added 1.7%, to 1,209. The Nasdaq ticked up 1.3%, to 2,607.

The Asian markets are trading higher with the Shanghai Composite, Hang Seng and Nikkei indices, up nearly 1-2%.

On Thursday, the Foreign Institutional Investors were net buyers of Rs 137 crore in cash and the Domestic Institutional Investors were net buyers of Rs 4 crore.

Markets are expected to, further, react to RBI's decision to go for another rate hike to tame price pressures in order to boost growth in its monetary review, due today. The chances of RBI hiking the rates by 25 bps increased after August's data revealed that inflation rose to a 13-month high. "A pause (if at all it materialises) will be accepted by markets gleefully. What the RBI says in its policy statement will be crucial. The short-term sentiment will be driven by the outcome of the RBI meet and overseas events," says Amar Ambani, Head of Research, IIFL - India Private Clients.

Meanwhile, after market hours the government hiked petrol prices by Rs 3 per litre. D K Aggarwal, Chairman Managing Director, SMC Investments and Advisors Limited said, "The recent petrol price hike can help OMCs such as BPCL, HPCL and IOC in recovering the under-recoveries. As per the OMCs, the recent rupee depreciation is resulting into heavy under-recovery to an extent of INR 9,000 Crores for every one rupee depreciation. This petrol price hike can also help ONGC in its FPO, which is scheduled to open on 20th September".

Among the sectoral indices, BSE Oil & gas, PSU and IT indices are leading the losses, up nearly a percent each. ONGC, Indian Oil Corp, BPCL and Essar Oil, up 2-6% each, are the major gainers from the oil & Gas pack.

TCS, Patni Computer Systems, Tech Mahindra and HCL Technologies, up 1-2% each, are the major gainers from the IT pack.

Among the Sensex 30 stocks, ONGC had moved up 6% at Rs 275. Other prominent gainers include Tata Motors, TCS, Sterlite Industries and Tata Power, up 2-3% each. On the other hand, Maruti Suzuki, Bharti Airtel, Hindustan Unilever, Bajaj Auto and Hero MotoCorp, down 1-2% each, are the major losers among the Sensex stocks.