Mumbai - The benchmark BSE Sensex staged a strong comeback by surging over 278 points and the NSE Nifty hit a new high of 8,626.95 in early trade Thursday as shares of ITC led the rally on expectations that the proposal to ban sale of loose cigarettes is likely to be put on hold.

Besides, a firming trend in other Asian markets buoyed the trading sentiments here.

The 30-share index, which had retreated from record-high by falling 251.28 points in the past three sessions, recovered by 278.41 points, or 0.98 percent, to 28,721.12 with all the sectoral indices, led by FMCG, realty, oil & gas and banking, trading in positive zone with gains up to 2.26 percent.

Also, the National Stock Exchange index Nifty gathered 89.30 points, or 1.04 percent, to 8,626.95, breaching its previous peak of 8,623 touched on December 1.

Equity brokers said sentiments bolstered on expectations that a Health Ministry proposal to ban sale of loose cigarettes is likely to be put on hold following objections by some MPs, including some Union ministers, and farmers associations against taking drastic regulatory steps.

Besides, a better trend at other Asian markets after American bourses closed at yet another record-high in yesterday's trade after a Federal Reserve report showed the US economy was growing, boosted trading sentiments here.

Among cigarette companies, ITC Ltd rallied by 3.98 percent to Rs 377.45, Godfrey Phillips rose 6.57 percent to Rs 627.55, Golden Tobacco by 4.02 percent to Rs 37.55 and VST Industries rose 2.43 per cent to Rs 1,915.

Among other Asian markets, Hong Kong's Hang Seng was up 0.54 percent while Japan's Nikkei rose 0.91 percent in early trade today.

The US Dow Jones Industrial Average gained 0.18 percent to hit fresh record-high in yesterday's trade. (PTI)