The benchmark index of the Bombay Stock Exchange (BSE), Sensex increased 1.35 percent to its highest level in six months to 18,089.99 in the early morning trade on Wednesday mainly backed by growth in auto and engineering.

The Sensex increased due to higher foreign fund inflows, rising rupee and easing inflationary pressures in the Indian economy. The index has crossed the 18,000-point mark for the first tie since August 2011.

The investor confidence has been boosted by indications that there might a solution to Greek crisis. The sentiment has also been lifted due to rise in the value of rupee and easing of inflation.

The Indian national currency has risen more than 9 per cent in the last two months due to increased foreign inflows after it become the worst performing currency in Asian region in 2011. The rupee has strengthened to the level of 49.1 against the US dollar on Wednesday compared to a low of 54 in December 2011.

Foreign investors have invested about $4.17 billion in the Indian stock so far in 2012. They have sold stock worth $1.56 billion during the same period in the previous year.