Mumbai, Jan 2 (IANS): The Sensex and Nifty ended sharply higher on Thursday after China announced a 50 basis points (bps) rate cut in its lending rate, firing up metal stocks, even as India's monthly GST revenue collection crossed Rs 1 lakh crore for the second straight month.

Besides, aided by optimism on a US-China trade deal, the Nifty metal index jumped 2.68 per cent. Hindustan Copper advanced 19 per cent, Steel Authority of India nearly 10 per cent and National Aluminium Company over 6 per cent.

The benchmark Sensex closed 320.62 points, or 0.78 per cent higher at 41,626.64, while the Nifty touched a record closing high of 12,282.95, advancing by 100 points.

Vinod Nair of Geojit Financial Services said: "The government's more than double capex plan for the next 5 yrs and uptick in steel prices with the announcement of a US-China deal signing date pushed the market higher led by sectors such as infrastructure, commercial vehicles, cement and metals".

Moreover, Nifty banking stocks also surged over 1 per cent. RBL Bank, Federal Bank and IndusInd Bank jumped in the range of 3 to 6 per cent.

Shrikant Chouhan of Kotak Securities said: "The hike in steel prices undertaken by steel makers boosted the market sentiment heavily. The move indirectly suggests recovery optimism in the core economy-related sectors like infra, capital goods, cement, commodities and transport going ahead.

The Nifty opened on Thursday at 12,200 and almost closed near its all-time high level of 12,293.