The BSE (^BSESN : 17730.24 -25.7) benchmark Sensex edged 0.2 per cent higher early on Thursday, tracking small gains in Asian markets, but investors were cautious after the US Federal Reserve held rates steady but downgraded its view on economic recovery.

At 9 a.m., the 30-share BSE index was up 0.17 per cent at 17,787.73 points, with 26 components advancing, after opening lower.

The 50-share NSE (^NSEI : 5320.6 -2.55) index was up 0.2 per cent at 5,335.70.

Indian stock markets crumbled more than 4% during the week for the first time this year on account of aggressive selling action by foreign insitutional investors (FIIs) and owing to China's monetary stiffening and US banks rules.

China`s central bank announced a 50 basis points increase in banks' RRR on Monday and US President Barack Obama projected new limits on the size and trading patterns of big US banking institutions on Thursday.