Benchmark indices scaled fresh highs in the afternoon trade for the third time in five sessions as investors continued to remain bullish about the prospects of a good monsoon after reports that rains are expected to arrive on the southern Kerala coast on May 30, two days ahead of the schedule.
Sentiment was also lifted by Asian stocks as they hit fresh-two year high on Tuesday on the back of an overnight rise in Wall Street, while oil extended gains after major producers Saudi Arabia and Russia pledged to push for an extension of supply cuts into 2018.
The 30-share Sensex rose as much as 268 points to notch its fresh high of 30,590, while the 50-share Nifty rallied 71 points to its lifetime high of 9,517. Last time, both the indices had hit their record highs on May 11.
At 2:03 pm, the S&P BSE Sensex was trading at 30,556, up 234 points, while the broader Nifty50 was ruling at 9,503, up 58 points.
In the broader market, the S&P BSE Midcap index and the S&P BSE Smallcap index added 0.2% and 0.4%, respectively.
"The gains in the markets have been mainly been lifted by domestic and foreign institutional investors turning net buyers in the past week. Along with that macro factors like benign inflation, good monsoon prospects, stong government at the centre added to the sentiment. Lower inflation may also lead the RBI to cut rates in the near future," said Ankur Varman, AVP - Institutional Equity sales at SBI Capital Securities.
He added that, "The rally will only correct in case of a huge global incident. As of now, India remians stable on a global as well as a domestic level and the global markets are moving in the same tandem. Hence, in lack of any major external factor, the rally will continue."
Bharti Airtel, Dr Reddy’s, TCS, ITC and Tata Motors gained the most on BSE Index while ONGC, Asian Paints, Coal India and Infosys lost the most in the index.
Banks and metal stocks were trading under pressure while technology and FMCG stocks gained in today’s deals.
IT stocks gained with the BSE IT index rising as much as 1%. Tata Consultancy Services gained as much as 1.7%, while Wipro rose up to 1%.
Natco Pharma climbed as much as 3.1% after the Reserve Bank of India raised the foreign investment limit in the company to 49% from 31.5%.
Among the losers, Sun TV Network and Astrazeneca Pharma dropped up to 2% each after U.S. investment service provider MSCI removed the stocks from its MSCI Global Small Cap Index on Monday.