New Delhi, May 27 (IANS): Capitalising on their opening session gains, domestic equity benchmark indices settled week's last trading session sharply higher in the green led by gains in IT, media, and banking stocks coupled with strong global cues.

Nifty IT was the top sectoral gainer at 2.5 per cent.

Sensex closed at 54,885 points, up 632 points or 1.2 per cent, Nifty at 16,352 points,up 182 points or 1.1 per cent.

With Friday's gains, indices have managed to chart on the positive territory for the second straight day.

"Joining the global rally, the investors were in a buying mood following favourable retail earnings in the US," said Vinod Nair, Head of Research at Geojit Financial Services.

Receding FII selling also provided comfort to the domestic market in bringing down volatility.

"The RBI's upcoming policy meeting will be a key factor in the market, where they are expected to announce an additional policy rate hike of 25-35 basis points."