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The Sensex and Nifty closed at their record highs for a second consecutive session on earnings optimism and positive global cues, a day after a major technical disruption affected trade on the National Stock Exchange.
Traders said that apart from a fresh spell of buying by foreign funds, continuous buying by domestic institutional investors ramped up the momentum, lifting indices to new highs.
The broader NSE index closed up 15 points or 0.15 per cent at 9,786.05, after climbing to a new peak of 9,829.40 earlier in the session. The benchmark BSE index ended 31.45 points or 0.1 per cent higher at 31,747.09, having touched a record high of 31,885.11.
Investors were keeping an eye on inflation and industrial production data to be released tomorrow.
Among BSE sectoral indices, IT index was the star-performer and was up 0.91 per cent, followed by auto 0.8 per cent, TECk 0.35 per cent and capital goods 0.28 per cent. On the other hand, realty index was down 1.56 per cent, infrastructure 0.72 per cent, consumer durables 0.7 per cent and healthcare 0.65 per cent.
Top five Sensex gainers were Bajaj Auto (+2.44%), Tata Motors (+2.28%), NTPC (+1.81%), M&M (+1.77%) and Infosys (+1.75%), while the major losers were Bharti Airtel (-2.59%), Cipla (-2.06%), Wipro (-1.92%), Coal India (-1.85%) and ONGC (-1.54%).
Volumes recover on NSE
Volumes recovered on the NSE, with traders reporting no issues with placing trades or quotations. A technical glitch had disrupted trading at the country's largest exchange on Monday for five hours.
Domestic shares tracked Asian peers, which gained on Tuesday after global markets rallied overnight on robust economic data from Germany and renewed interest in US technology stocks spurred by an Amazon Prime online sale event.
Traders also attributed the rise to unwinding of short positions in futures and options after market regulator Securities and Exchange Board of India banned the use of offshore derivative instruments such as participatory notes (P-notes) that track other derivatives.
“With SEBI issuing a circular that all naked positions in derivatives by P-notes to be wound up, and with most F&O contracts not being long term, everything has to be wound up in three-four days,” said Rakesh Tarway, head of research at Reliance Securities.
“There are lot of shorts built in stocks like TCS Ltd and Infosys, and when the positions are wound up, there will be a rally,” Tarway explained.
Asian shares
Asian shares and the dollar cautiously edged higher on Tuesday, as investors awaited testimony from Federal Reserve Chair Janet Yellen for clues on when the central bank would tighten US monetary policy.
MSCI's broadest index of Asia-Pacific shares outside Japan edged a few points higher in early trading, with sentiment underpinned by technology-led gains on Wall Street. Japan's Nikkei stock index was up 0.1 per cent, while Australian shares slipped 0.2 per cent.
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